GCH TECHNOLOGY CO.(688625) 国信证券·2024-08-19 01:41Investment Rating - The report maintains an "Outperform" rating for Chenghe Technology (688625 SH) [2][4] Core Views - Chenghe Technology achieved steady revenue and profit growth in H1 2024, with total operating revenue reaching 414 million yuan, up 12 02% YoY, and net profit attributable to shareholders of 128 million yuan, up 17 37% YoY [2][6] - The company's core products, nucleating agents and synthetic hydrotalcite, continue to gain market share through product upgrades and R&D investments, driving revenue growth [2][6] - Gross margin improved to 45 09% in H1 2024, up 1 56 percentage points from 2023, while the expense ratio dropped to 8 83%, the lowest since its IPO [2][6] - The IPO-funded project in Guangzhou is progressing well, with 14,400 tons/year of capacity already operational and an additional 22,200 tons/year expected to be completed by September 2024 [2][8] Financial Performance - In H1 2024, the nucleating agent business generated 253 million yuan in revenue, up 27 67% YoY, with a gross margin of 56 78% [2][6] - The synthetic hydrotalcite business achieved 580,000 yuan in revenue, up 20 54% YoY, with a gross margin of 48 35%, up 3 92 percentage points from 2023 [2][6] - Operating cash flow increased by 20 50% YoY to 103 million yuan in H1 2024 [2][6] Industry and Product Outlook - Nucleating agents are widely used in polypropylene (PP) modification, with increasing demand in lithium battery materials and automotive components [2][8] - Synthetic hydrotalcite is expanding its applications beyond PVC stabilization, including agricultural films and spandex production, due to its eco-friendly and performance-enhancing properties [2][8] - The domestic market for nucleating agents and synthetic hydrotalcite has significant import substitution potential, supporting Chenghe Technology's growth [2][10] Financial Forecasts - Revenue is projected to grow to 979 million yuan in 2024, 1 152 billion yuan in 2025, and 1 334 billion yuan in 2026, with YoY growth rates of 22 5%, 17 6%, and 15 8% respectively [3] - Net profit attributable to shareholders is expected to reach 268 million yuan in 2024, 326 million yuan in 2025, and 387 million yuan in 2026, with YoY growth rates of 18 7%, 21 6%, and 18 5% respectively [3] - EPS is forecasted at 1 98 yuan in 2024, 2 41 yuan in 2025, and 2 86 yuan in 2026, with a PE ratio of 18 0x, 14 8x, and 12 5x respectively [3][10]