Shanghai Huayi (600623) 民生证券·2024-07-24 15:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][105]. Core Insights - The company has significantly improved management efficiency and employee productivity over the past five years, with a 17% reduction in total employees from 13,020 in 2019 to 10,774 in 2023, while revenue per employee increased by 32% from 2.91 million to 3.84 million yuan [2][20]. - The integrated base project in Qinzhou, Guangxi, is expected to open new avenues for growth, with over 30 billion yuan invested and multiple projects already in production [4][7][77]. - The company operates in various sectors including energy chemicals, green tires, fine chemicals, and advanced materials, showcasing strong competitive advantages and innovation capabilities [4][6][105]. Summary by Sections Financial Performance - The company achieved a total revenue of 40.38 billion yuan in 2023, with a net profit attributable to shareholders of 9.05 billion yuan [6][31]. - Forecasted net profits for 2024-2026 are 10.97 billion, 16.46 billion, and 17.11 billion yuan respectively, with corresponding EPS of 0.51, 0.77, and 0.80 yuan [4][105]. Business Segments - Energy Chemicals: The segment generated 7.16 billion yuan in revenue in 2023, with a negative gross margin of -1.27 billion yuan due to low product prices [84]. - Green Tires: The tire business reported 10.18 billion yuan in revenue in 2023, with a gross margin of 12.59 billion yuan, reflecting a 52% increase year-on-year [50][100]. - Fine Chemicals: This segment achieved 12.66 billion yuan in revenue, with a gross margin of 11.88 billion yuan, despite a 10% decline in gross margin [54][83]. Growth Drivers - The Qinzhou integrated base is a key growth driver, with significant capacity expansion planned, including projects for propylene, acrylic acid, and other derivatives [7][77]. - The company is also focusing on optimizing its employee structure, with a notable increase in technical staff by 11% while reducing administrative and production personnel [2][20]. Valuation - The current price of the stock is 6.01 yuan, with projected PE ratios of 12x, 8x, and 7x for 2024, 2025, and 2026 respectively, indicating potential undervaluation compared to peers [4][105].