Huafon Spandex(SZ:002064)2024-07-15 04:01Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook compared to market performance [7]. Core Insights - The company has exceeded expectations in its H1 2024 performance, forecasting a net profit attributable to shareholders between 1.38 billion to 1.68 billion yuan, representing a year-on-year growth of 2% to 24% [7]. - The growth in performance is attributed to the gradual release of new production capacities for spandex and adipic acid, alongside enhanced economies of scale, with gross margins remaining stable compared to the previous year [7]. - The textile industry is experiencing high demand, with a composite prosperity index of 63.3% in Q2 2024, leading to significant increases in spandex production and sales [7]. - The company is expected to maintain its growth trajectory in the second half of the year, supported by seasonal demand peaks [7]. - The profitability of adipic acid remains under pressure, but the company’s new 400,000-ton adipic acid project, launched in September 2023, is anticipated to provide substantial leverage in the next cycle [7]. Financial Summary - The company’s total revenue for 2024 is projected to be 30.5 billion yuan, with a year-on-year growth rate of 16% [8]. - The net profit for 2024 is estimated at 3.05 billion yuan, reflecting a year-on-year increase of 23% [8]. - Earnings per share (EPS) are forecasted to be 0.61 yuan for 2024, increasing to 0.96 yuan by 2026 [8]. - The gross margin is expected to improve from 16.5% in 2024 to 20.2% in 2026 [8].