HUALU-HENGSHENG(600426) 浙商证券·2024-08-23 01:23Investment Rating - Buy (Maintained) [5] Core Views - The company's revenue and net profit have shown significant growth in H1 2024, with revenue reaching 16.975 billion yuan (yoy +37.35%) and net profit attributable to shareholders reaching 2.224 billion yuan (yoy +30.10%) [1] - The company's market share has expanded due to the full production of its Jingzhou base and capacity expansion at its Dezhou headquarters, leading to increased sales of key products despite price declines in some categories [2] - The company's profitability is expected to improve steadily due to lower raw material costs and ongoing cost reduction efforts, with gross margin increasing by 0.34pct to 21.20% and net margin increasing by 0.24pcts to 14.06% in H1 2024 [2] - The company's product prices have strong bottom support, and the recovery of industry conditions is expected to drive further performance improvement [2] - The company is expected to achieve net profits of 4.615 billion yuan, 5.588 billion yuan, and 6.382 billion yuan in 2024, 2025, and 2026, respectively, with corresponding PE ratios of 10x, 8x, and 7x [3] Financial Performance Summary Revenue and Profit - H1 2024 revenue: 16.975 billion yuan (yoy +37.35%), Q2 revenue: 8.997 billion yuan (yoy +42.69%, qoq +12.78%) [1] - H1 2024 net profit: 2.224 billion yuan (yoy +30.10%), Q2 net profit: 1.159 billion yuan (yoy +24.89%, qoq +8.78%) [1] - Revenue breakdown: New energy and new materials (8.318 billion yuan, yoy +18.7%), chemical fertilizers (3.644 billion yuan, yoy +39.9%), organic amines (1.263 billion yuan, yoy -5.0%), acetic acid and derivatives (2.039 billion yuan, yoy +145.7%) [2] Product Sales and Prices - New energy and new materials: Sales volume 1.2355 million tons (yoy +28.5%), average price 6,732 yuan/ton (yoy -7.6%) [2] - Chemical fertilizers: Sales volume 2.165 million tons (yoy +43.5%), average price 1,683 yuan/ton (yoy -2.5%) [2] - Organic amines: Sales volume 282,800 tons (yoy +14.8%), average price 4,466 yuan/ton (yoy -17.2%) [2] - Acetic acid and derivatives: Sales volume 754,500 tons (yoy +148.0%), average price 2,702 yuan/ton (yoy -1.0%) [2] Profitability and Margins - Gross margin: 21.20% in H1 2024 (yoy +0.34pct) [2] - Net margin: 14.06% in H1 2024 (yoy +0.24pcts) [2] - Jingzhou base net margin: 14.41% (revenue 3.765 billion yuan, net profit 543 million yuan) [2] Financial Forecasts - Revenue forecast: 33.758 billion yuan (2024E, yoy +23.84%), 38.125 billion yuan (2025E, yoy +12.94%), 41.661 billion yuan (2026E, yoy +9.27%) [4] - Net profit forecast: 4.615 billion yuan (2024E, yoy +29.06%), 5.588 billion yuan (2025E, yoy +21.09%), 6.382 billion yuan (2026E, yoy +14.21%) [4] - EPS forecast: 2.17 yuan (2024E), 2.63 yuan (2025E), 3.01 yuan (2026E) [4] Valuation Metrics - PE ratio: 10x (2024E), 8x (2025E), 7x (2026E) [3] - EV/EBITDA: 5.99x (2024E), 4.97x (2025E), 4.22x (2026E) [8] - P/B ratio: 1.46x (2024E), 1.31x (2025E), 1.16x (2026E) [9] Key Financial Ratios - Gross margin: 22.29% (2024E), 23.23% (2025E), 23.83% (2026E) [9] - Net margin: 13.67% (2024E), 14.66% (2025E), 15.32% (2026E) [9] - ROE: 14.51% (2024E), 15.70% (2025E), 15.97% (2026E) [9] - ROIC: 12.65% (2024E), 13.63% (2025E), 13.88% (2026E) [9] Balance Sheet and Cash Flow - Total assets: 47.235 billion yuan (2024E), 52.034 billion yuan (2025E), 57.303 billion yuan (2026E) [8] - Operating cash flow: 6.628 billion yuan (2024E), 9.099 billion yuan (2025E), 9.915 billion yuan (2026E) [9] - Capital expenditure: 4.850 billion yuan (2024E), 4.845 billion yuan (2025E), 4.840 billion yuan (2026E) [9]