XINHUA CHEMICAL(SH:603867) SINOLINK SECURITIES·2024-08-15 06:03Investment Rating - The report maintains a "Buy" rating for the company [1][2] Core Insights - The company achieved a revenue of 1.48 billion RMB in the first half of 2024, representing an 18% year-on-year growth, with a net profit of 150 million RMB, up 7% year-on-year [1] - The main business remains stable, with product sales growth driving performance, particularly in the fragrance and flavor segment, which saw a significant increase in sales volume [1] - The company is expanding its fragrance production capacity, which is expected to support long-term growth [1][2] Summary by Sections Performance Overview - In Q2 2024, the company reported a revenue of 740 million RMB, a 24% increase year-on-year, but a 0.6% decrease quarter-on-quarter [1] - The sales volume for the company's three core products in the first half of 2024 was 62,000 tons for fatty amines, 29,000 tons for organic solvents, and 11,000 tons for fragrances, with growth rates of 15%, -1%, and 67% respectively [1] Price Trends - The average selling price for fatty amines was 11,813 RMB/ton, down 3.8% year-on-year; organic solvents increased by 8.1% to 8,413 RMB/ton; while fragrances decreased by 1.4% to 34,673 RMB/ton [1] Capacity Expansion - The company is expanding its fragrance production capacity, with a total of 16,000 tons/year from its subsidiary and an additional 16,650 tons/year from a new facility in Ningxia [1] - A new project announced in June 2024 will add 7,155 tons of new products, with a total investment of 60 million RMB, expected to be completed in 5 months [1] Profit Forecast and Valuation - The company is projected to achieve net profits of 334 million RMB, 451 million RMB, and 553 million RMB for 2024, 2025, and 2026 respectively, with a downward adjustment of 13% for 2024 [2] - The current market capitalization corresponds to PE ratios of 11.63, 8.62, and 7.03 for the years 2024, 2025, and 2026 respectively [2]