BAOFENG ENERGY(SH:600989) Orient Securities·2024-08-13 13:37Investment Rating - The report maintains a "Buy" rating for the company with a target price of 18.76 CNY, reflecting a 30% premium over the average PE of comparable companies [2][4]. Core Insights - The company reported a significant year-on-year revenue growth of 29.09%, reaching 16.897 billion CNY, and a net profit increase of 46.44%, amounting to 3.305 billion CNY for the first half of 2024. The second quarter alone saw a revenue of 8.670 billion CNY, up 36.39%, and a net profit of 1.884 billion CNY, up 75.75%. This growth is attributed to the release of polyethylene capacity and a decrease in raw material prices [1][2]. - The Inner Mongolia project is set to commence production in October, with a capacity of 3 million tons. This project utilizes advanced DMTO technology, which is expected to enhance profitability due to its proximity to major sales regions [1]. - The Xinjiang project is anticipated to create new growth opportunities, with plans for significant production capacities in methanol and downstream products. The cost advantages in the region could lead to even greater growth than the Inner Mongolia project [1]. Financial Summary - The company’s financial forecasts for 2024-2026 indicate an EPS of 1.11, 1.72, and 1.84 CNY respectively. The projected revenue for 2024 is 37.238 billion CNY, with a year-on-year growth of 27.8% [2][8]. - The gross margin is expected to improve to 33.7% in 2024, with a net margin of 21.9% [8]. - The company’s total assets are projected to reach 99.207 billion CNY by 2024, with a debt-to-equity ratio of 52.6% [8].