Huafon Spandex(SZ:002064) Orient Securities·2024-08-11 05:00Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to 8.10 CNY based on a 15x PE ratio for comparable companies in 2024 [2][4]. Core Insights - The company reported a revenue of 13.744 billion CNY for the first half of 2024, representing an 8.89% year-on-year increase, and a net profit attributable to shareholders of 1.518 billion CNY, up 11.74% year-on-year. In Q2 alone, revenue reached 7.087 billion CNY, a 10.2% increase, and net profit was 0.835 billion CNY, up 14.86% year-on-year. The growth is attributed to the effective release of production capacity for key products, spandex and adipic acid, leading to increased production and sales [1]. - The company demonstrated strong competitive advantages despite a challenging industry environment, as the unit price differentials for spandex and adipic acid decreased significantly compared to the same period in 2023. The company managed to achieve growth through volume expansion and cost optimization [1]. - New projects are progressing steadily, including a 300,000-ton differentiated spandex project and the construction of a 1.1 million-ton integrated natural gas project and a 240,000-ton PTMEG project. These initiatives are expected to enhance the company's core product output and deepen its integration advantages in the spandex industry, further improving cost competitiveness [1]. Financial Forecast and Investment Recommendations - The earnings per share (EPS) forecasts for 2024 and 2025 have been adjusted to 0.54 CNY and 0.60 CNY respectively, with a new forecast for 2026 set at 0.68 CNY. The target price is based on a 15x PE ratio for comparable companies in 2024 [2][4]. - The company is expected to see revenue growth from 29.165 billion CNY in 2024 to 33.797 billion CNY by 2026, with corresponding net profit growth from 2.694 billion CNY to 3.361 billion CNY over the same period [6][9].