Huafon Spandex(002064) Guotai Junan Securities·2024-08-11 15:25Investment Rating - The report maintains a rating of "Accumulate" for the company [7][9]. Core Views - The company's Q2 2024 performance met expectations, with a focus on enhancing upstream PTMEG layout to solidify cost advantages. The demand for spandex is expected to grow due to the increasing need for elastic fabrics, leading to an improved supply-demand balance in the industry, which the company is likely to benefit from [8][9]. Financial Summary - Revenue for 2022 was 25,884 million, with a projected increase to 26,298 million in 2023, and further growth to 27,778 million in 2024, reflecting a year-on-year growth of 1.6% [6]. - Net profit attributable to the parent company decreased from 2,844 million in 2022 to 2,478 million in 2023, but is expected to rebound to 3,183 million in 2024, marking a growth of 28.4% [6]. - Earnings per share (EPS) is projected to rise from 0.50 in 2023 to 0.64 in 2024, and further to 0.72 in 2025 [6]. Target Price and Valuation - The target price for the company is set at 9.90, based on a price-to-earnings (PE) ratio of 15.47 times for 2024 [9]. - The current market price is 7.53, with a price-to-book (PB) ratio of 1.5 [4][14]. Performance Metrics - The company achieved a revenue of 137.44 million and a net profit of 15.18 million in the first half of 2024, representing year-on-year growth of 8.89% and 11.74%, respectively [9]. - In Q2 2024, the company reported revenue of 70.87 million and a net profit of 8.35 million, with year-on-year increases of 10.21% and 14.78% [9]. Industry Position - The company is recognized as a leader in the spandex, adipic acid, and raw liquid industries, benefiting from cost advantages and scale [9]. - The demand for spandex is projected to grow at a rate of 7-8%, with the supply side nearing the end of an expansion cycle, indicating a favorable industry outlook [9].