TKGF(SH:601233) EBSCN·2024-08-29 12:42Investment Rating - The report maintains a "Buy" rating for Tongkun Co., Ltd. (601233.SH) with a current price of 11.71 CNY [1] Core Views - The company experienced significant year-on-year growth in H1 2024, with revenue reaching 48.2 billion CNY, up 31%, and net profit attributable to shareholders at 1.065 billion CNY, up 911% [4][5] - Q2 2024 performance showed a decline due to weak industry demand, but the outlook for H2 2024 is optimistic as the demand for polyester filament is expected to rise [5] - The company has launched a stock incentive plan, reflecting confidence in future growth, with performance targets set for net profit growth [6] - The initiation of the integrated refining project in Indonesia marks the company's entry into the refining sector, indicating potential for future growth [6] Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 48.2 billion CNY, a 31% increase year-on-year, and a net profit of 1.065 billion CNY, a 911% increase [4] - Q2 2024 revenue was 27.1 billion CNY, up 29% year-on-year and 28% quarter-on-quarter, with net profit at 485 million CNY, down 19% year-on-year and 16% quarter-on-quarter [4] Market Conditions - In Q2 2024, the domestic PTA price spread was 404 CNY/ton, down 84 CNY/ton year-on-year and 12 CNY/ton quarter-on-quarter, indicating pressure on profitability due to narrowing spreads in the chemical fiber industry [5] - The report anticipates an improvement in the supply-demand balance for polyester filament in H2 2024, driven by seasonal demand and production cuts by leading companies [5] Strategic Initiatives - The company has introduced a stock incentive plan with ambitious performance targets, including a net profit growth rate of no less than 40.5% for 2023 and cumulative growth rates of 200.5% and 450.5% for 2023-2024 and 2023-2025, respectively [6] - The launch of the integrated refining project in Indonesia involves an investment of approximately 8.624 billion USD, with a capacity of 16 million tons/year, indicating a strategic expansion into the refining sector [6] Profit Forecast and Valuation - The report adjusts profit forecasts for 2024-2025, expecting net profits of 2.546 billion CNY (down 18%) and 3.891 billion CNY (down 15%) for 2024 and 2025, respectively, with an EPS of 1.06 CNY for 2024 [6][8] - The company is expected to maintain its leading position in the polyester market, with a gradual increase in market share as new capacities come online [6]