HYPC(000703) 长城证券·2024-09-02 10:11Investment Rating - The report maintains a "Buy" rating for Hengyi Petrochemical (000703 SZ) [2] Core Views - Hengyi Petrochemical's 1H24 performance showed significant improvement, with revenue reaching 64 764 billion yuan, up 0 70% YoY, and net profit attributable to shareholders surging 465 59% YoY to 430 million yuan [2] - The company's profitability is expected to continue improving due to the upward trend in the polyester industry and the supply shortage of refined oil in Southeast Asia [3][6] - Hengyi's integrated industrial chain, particularly the Brunei PMB petrochemical project, is expected to enhance its competitiveness and profitability [7] Financial Performance - In 1H24, Hengyi's gross profit margin increased by 0 85 percentage points YoY to 4 13%, while net profit margin rose by 0 73 percentage points to 0 86% [3] - The company's chemical fiber and petrochemical segments performed well, with revenues increasing by 5 28% and 16 42% YoY, respectively [3] - Operating cash flow decreased by 87 90% YoY to 97 million yuan, mainly due to increased inventory in the polyester segment [3] Industry Outlook - The polyester industry is experiencing strong demand, driven by growth in downstream sectors such as apparel, home textiles, and industrial textiles [3] - The refined oil market in Southeast Asia is facing a supply shortage, which is expected to benefit Hengyi's refining segment [6] - The company's PTA business is under pressure due to increased market competition, but demand from the polyester industry provides some support [6] Future Projections - Hengyi's revenue is expected to grow from 142 625 billion yuan in 2024E to 168 288 billion yuan in 2026E, with net profit attributable to shareholders projected to increase from 955 million yuan to 1 775 billion yuan over the same period [2] - The company's EPS is forecasted to rise from 0 26 yuan in 2024E to 0 48 yuan in 2026E [2] - Hengyi's ROE is expected to improve from 2 9% in 2024E to 4 7% in 2026E [2]