TKGF(SH:601233) Guotai Junan Securities·2024-09-05 00:08Investment Rating - The report maintains a "Buy" rating for Tongkun Co., Ltd. (601233) and lowers the target price to 15.70 CNY from the previous 17.70 CNY [3][4]. Core Views - The company's Q2 2024 performance met expectations, with a significant year-on-year revenue increase of 30.67% to 48.2 billion CNY and a net profit attributable to shareholders of 1.065 billion CNY, reflecting a 778% increase [3]. - The report highlights that the polyester filament market is experiencing price improvements due to the leading companies' pricing strategies, with average prices for POY, FDY, and DTY increasing by 2.58%, 0.70%, and 2.71% year-on-year, respectively [3]. - Investment income from Zhejiang Petrochemical, in which the company holds a 20% stake, has turned profitable, contributing 4.17 billion CNY in the first half of 2024, compared to a loss of 350 million CNY in the same period of 2023 [3]. Summary by Sections Financial Performance - In H1 2024, the company achieved a revenue of 48.2 billion CNY, with a net profit of 1.065 billion CNY and a non-recurring profit of 900 million CNY, marking a 2800% increase year-on-year [3][10]. - The Q2 2024 net profit was 485 million CNY, down 18.67% year-on-year and 16.31% quarter-on-quarter, with core profit excluding investment income at approximately 324 million CNY [3]. Market Dynamics - The report notes that the polyester filament industry has a high concentration, with a CR6 close to 70%, enhancing the pricing power of leading companies [3]. - The "one-price" model adopted by leading companies has improved price differentials, with the price gap for various filament types showing month-on-month improvement [3]. Future Outlook - The report anticipates a recovery in demand driven by downstream inventory replenishment, particularly in the winter season, despite current challenges posed by high temperatures affecting production and sales [3].