SHYNDEC(600420) Huafu Securities·2024-07-09 01:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the market benchmark index within the next 6 months [18][22]. Core Views - The company's H1 performance significantly exceeded expectations, with profits nearly doubling, and the H1 net profit forecast for 2024 is projected to be between 690 million to 750 million, representing a year-on-year growth of 99.4% to 116.8% [17]. - The strong performance is attributed to product structure optimization and cost reduction initiatives, leading to a substantial increase in profit margins, particularly in the raw materials segment [17]. - The company has a solid financial position with total assets of 19.35 billion and a debt ratio of 25.91%, providing ample cash for potential mergers and acquisitions [17]. Financial Data and Valuation - Revenue for 2022 was 12.96 billion, with a projected decline to 12.07 billion in 2023, followed by a recovery to 12.44 billion in 2024, and further growth to 13.23 billion in 2025 and 14.16 billion in 2026 [11]. - Net profit is expected to rise from 628 million in 2022 to 692 million in 2023, with a significant jump to 1.15 billion in 2024, reflecting a growth rate of 67% [11]. - The earnings per share (EPS) is projected to increase from 0.52 in 2023 to 0.86 in 2024, and further to 1.00 in 2025 and 1.14 in 2026 [11]. Key Financial Ratios - The price-to-earnings (P/E) ratio is expected to decrease from 20.6 in 2023 to 12.4 in 2024, indicating improved valuation as earnings grow [11]. - The price-to-book (P/B) ratio is projected to decline from 1.2 in 2023 to 1.1 in 2024, suggesting a more favorable valuation relative to book value [11]. - The company's return on equity (ROE) is expected to improve from 4.8% in 2023 to 7.4% in 2024, reflecting enhanced profitability [11].