华锦股份：炼化景气度保持低迷，未来有望改善

Investment Rating - The investment rating for the company is "Buy" and is maintained [2][4]. Core Views - The refining sector remains sluggish, but there is potential for improvement in the future [2]. - The company reported a revenue of 21.163 billion yuan for the first half of 2024, a year-on-year decrease of 2.74% [2]. - The net profit attributable to the parent company was -0.743 billion yuan, down 10.00% year-on-year [2]. - The net cash flow from operating activities was -3.054 billion yuan, a decline of 10.09% year-on-year [2]. - In Q2 2024, revenue was 11.714 billion yuan, a decrease of 0.59% year-on-year but an increase of 23.96% quarter-on-quarter [2]. - The net profit attributable to the parent company in Q2 was -0.242 billion yuan, down 36.20% year-on-year but up 51.75% quarter-on-quarter [2]. Summary by Sections Company Overview - The company is a leading integrated refining and chemical enterprise in China, with a diverse product portfolio including diesel, polypropylene, polyethylene, ABS resin, fertilizers, mixed aromatics, fuel oil, asphalt, and lubricants [2][5]. Market Conditions - The demand for refined oil products has significantly improved due to enhanced travel needs domestically, while the overseas refined oil market is entering a seasonal peak, leading to a notable increase in gasoline demand [2]. - The chemical sector continues to face pressure, but the aromatics and refined oil products are experiencing better market conditions [2]. Financial Projections - The company expects net profits attributable to the parent company to be 0.16 billion yuan, 0.47 billion yuan, and 0.62 billion yuan for 2024, 2025, and 2026 respectively, with corresponding PE ratios of 39.1X, 13.6X, and 10.3X based on the closing price on August 30, 2024 [4]. Operational Strategies - The company is actively engaging in hedging activities to control crude oil procurement costs, as crude oil prices are volatile and significantly impact operational performance [5]. - The fertilizer segment is performing well, with cost advantages in urea production and effective coordination of natural gas supply [5]. - The company is collaborating on an oil reserve project to ensure stable crude oil supply, which is crucial given the high dependence on external energy sources [5]. Production Capacity - The company has a substantial production capacity across multiple bases, including 8.3 million tons of crude oil processing, 500,000 tons of ethylene, and 1.32 million tons of urea annually [5].