STL(SZ:002648) Huachuang Securities·2024-08-22 05:08Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 21.71 CNY [2][11]. Core Views - The company is positioned as a leader in light hydrocarbon integration, focusing on low-carbon chemical new materials and enhancing its competitive advantages through a complete C2+C3 industrial chain layout [2][18]. - The C2 project is expected to create a long-term growth curve due to its significant barriers to entry and the ongoing trend of ethylene raw material diversification and lightening [2][10]. - The C3 project is enhancing its layout and extending its supply chain, solidifying its leading position in the domestic C3 industry [2][10]. - The new materials project emphasizes innovation and R&D, with plans to invest 10 billion CNY over the next five years to develop high-end products [2][10]. Summary by Sections Company Overview - The company has established a complete C2+C3 industrial chain, focusing on light hydrocarbons as raw materials and low-carbon chemical new materials as core products [2][18]. - It has a stable shareholding structure with significant long-term incentives to support growth [22][24]. C2 Project - The C2 project benefits from a favorable supply-demand balance and is expected to maintain low ethane prices, enhancing economic efficiency [2][10]. - The company has built a solid industry moat through early investments in ethane pipelines and export facilities [2][10]. C3 Project - The C3 project is characterized by a growing domestic propylene supply and demand gap, with the company focusing on differentiated competitive advantages [2][10]. - Recent acquisitions and product expansions have improved the integration of the C3 industrial chain [2][10]. New Materials Project - The company is committed to innovation and R&D, with a focus on key strategic materials and advanced new materials [2][10]. - The α-olefins and EAA products are expected to start production in 2025, contributing to profit growth [2][10]. Financial Forecast - The company’s projected net profits for 2024-2026 are 56.38 billion CNY, 66.42 billion CNY, and 87.25 billion CNY, respectively, with corresponding EPS of 1.67 CNY, 1.97 CNY, and 2.59 CNY [3][11]. - The current market valuation corresponds to a PE ratio of 9x for 2024, 8x for 2025, and 6x for 2026, indicating strong growth potential [11][3].