BAOFENG ENERGY(SH:600989) Huachuang Securities·2024-08-21 04:40Investment Rating - The report maintains a "Strong Buy" rating for Baofeng Energy, with a target price of 20.06 CNY [2][8]. Core Views - In the first half of 2024, Baofeng Energy achieved operating revenue of 16.897 billion CNY, a year-on-year increase of 29.09%, and a net profit attributable to shareholders of 3.305 billion CNY, up 46.44% year-on-year [2]. - The second quarter saw significant performance improvement, with revenue reaching 8.67 billion CNY, a year-on-year increase of 36.39%, and a net profit of 1.884 billion CNY, up 75.80% year-on-year [2]. - The report highlights the positive impact of raw material price declines and improved price differentials in the olefin segment, contributing to overall revenue growth [2]. Summary by Sections Financial Performance - For H1 2024, Baofeng Energy reported a net profit of 3.305 billion CNY, with a non-recurring profit of -210 million CNY, including donations of 175 million CNY [2]. - Q2 2024 saw a net profit of 1.884 billion CNY, with a non-recurring profit of 2.034 billion CNY [2]. - The company’s EVA production capacity utilization was approximately 86% in Q2, contributing to performance growth [2]. Sales and Production Data - In Q2, the company sold 279,700 tons of polyethylene and 304,600 tons of polypropylene, with respective changes of -5.28% and +13.83% quarter-on-quarter [2]. - The sales volume of coke reached 1.7935 million tons, up 2.52% quarter-on-quarter [2]. - The report notes a significant increase in EVA sales, which reached 58,400 tons in Q2, a quarter-on-quarter increase of 342% [2]. Segment Analysis - The olefin segment benefited from rising olefin prices and falling raw material coal prices, with Q2 external purchase coal prices averaging 523 CNY/ton, down 77 CNY/ton quarter-on-quarter [2]. - The coke segment experienced a decline in both coke and coking coal prices, with Q2 external purchase coking coal prices at 1,074 CNY/ton, down 82 CNY/ton quarter-on-quarter [2]. Investment Projects - The Inner Mongolia olefin project is progressing as planned, with 70% of the investment already disbursed [2]. - The Xinjiang project has recently undergone its first public environmental impact assessment, indicating a significant future contribution to performance growth [2]. Profit Forecast - The report maintains profit forecasts for 2024-2026 at 8.631 billion CNY, 14.200 billion CNY, and 14.275 billion CNY respectively, with corresponding P/E ratios of 13x, 8x, and 8x [2].