Quechen Company(SH:605183) Xin Lang Cai Jing·2025-08-24 12:36Core Viewpoint - The company reported a steady growth in revenue and net profit for the first half of 2025, driven by increased production capacity and favorable market conditions in the tire industry [1][2]. Financial Performance - In H1 2025, the company achieved operating revenue of 1.11 billion yuan, a year-on-year increase of 3.9%, and a net profit attributable to shareholders of 280 million yuan, up 5.4% year-on-year [1]. - For Q2 2025, the company recorded operating revenue of 570 million yuan, with year-on-year and quarter-on-quarter growth of 4.5% and 6.2%, respectively [1]. - The company produced 184,000 tons of silica in H1 2025, a 3.9% increase year-on-year, with sales volume also reaching 184,000 tons, up 4.2% year-on-year [1]. Market Conditions - The decline in raw material prices, specifically soda ash and quartz sand, positively impacted the company's performance, with soda ash prices in East China dropping by 37% year-on-year in Q2 2025 [2]. - Despite a 1.2% year-on-year decrease in the average selling price of silica, the company managed to adjust its product mix, leading to a slight recovery in Q2 2025 prices [2]. Growth Initiatives - The company announced a planned investment of 900 million yuan in a biomass silica project, which is expected to enhance long-term growth potential [2]. - The expansion of production capacity is anticipated to support future growth in demand for high-dispersion silica driven by the increasing adoption of green tires [3]. Profit Forecast and Valuation - The company is projected to achieve operating revenues of 2.46 billion, 2.95 billion, and 3.52 billion yuan for 2025, 2026, and 2027, respectively, with corresponding net profits of 590 million, 690 million, and 820 million yuan [3]. - The estimated price-to-earnings (PE) ratios for the years 2025, 2026, and 2027 are 15, 13, and 11 times, respectively, maintaining a strong buy recommendation [3].