XfmGroup(SH:603225) Guotai Junan Securities·2024-09-05 03:10Investment Rating - The report maintains a "Buy" rating and lowers the target price to 15.15 yuan from the previous 19.18 yuan [2][6]. Core Views - The company's mid-year performance meets expectations, with a revenue of 31.3 billion yuan in Q2 2024, reflecting a year-on-year increase of 10.96%, and a net profit of 605 million yuan, up 26.17% year-on-year [2]. - The second quarter's performance benefited from the "one price" model adopted by leading companies in the filament industry, leading to improved gross margins [2]. - The report anticipates a recovery in demand driven by winter restocking needs, despite a slowdown in production due to high temperatures affecting demand in Q3 2024 [2]. Financial Summary - Revenue for 2024 is projected at 62.07 billion yuan, with a net profit forecast of 1.54 billion yuan, reflecting a year-on-year growth of 41.7% [3]. - The earnings per share (EPS) estimates for 2024, 2025, and 2026 are adjusted to 1.01 yuan, 1.27 yuan, and 1.52 yuan respectively [2][3]. - The company reported a net profit margin of 1.96% in Q2 2024, with a gross margin of 6.11%, both showing slight improvements year-on-year [2]. Market and Industry Outlook - The domestic filament capacity is expected to reach 42.86 million tons by the end of 2023, with a year-on-year increase of 9.98% [2]. - The report highlights a trend of increasing industry concentration, with major players strengthening their market positions as smaller companies exit the market [2]. - The anticipated new capacity additions for the industry in 2024 and 2025 are 2.65 million tons and 2.85 million tons respectively, indicating a slowdown in capacity growth compared to previous years [2].