CNCEC(SH:601117) Guotai Junan Securities·2024-09-27 02:01Investment Rating - The investment rating for China Chemical (601117) is "Buy" [2][4] Core Views - China Chemical signed new orders worth 244.8 billion yuan in the first eight months of 2024, representing a 20% increase year-on-year, with chemical engineering orders up 23% and overseas orders up 237% [3][4] - The company is focusing on expanding into high-value-added new materials, and its current price-to-book ratio (PB) is at 0.76, which is at a historical low [3][4] - The report maintains the earnings per share (EPS) forecast for 2024-2026 at 0.98, 1.07, and 1.15 yuan, with growth rates of 10%, 9%, and 8% respectively [4] Summary by Sections Company Overview - China Chemical is a leading player in the petrochemical and chemical engineering sectors, with a strong market share in coal chemical engineering domestically and a leading position internationally [4] Financial Performance - The company reported a net profit of 54.3 billion yuan for 2024E, with a growth rate of 10% expected [7] - The average price-to-earnings ratio (PE) is projected to be 7.6 for 2024, which is at the 15th percentile of its 10-year historical range [4][7] Market Trends - The manufacturing investment in the chemical sector increased by 10.7% year-on-year in August 2024, indicating a positive trend in the industry [4] - The report highlights that the chemical raw materials and products manufacturing investment is leading the overall manufacturing investment growth by 0.9 percentage points [4] Order Book and New Contracts - The cumulative new contracts signed in the first eight months of 2024 reached 256.1 billion yuan, with a year-on-year growth of 20% [8] - Domestic new contracts decreased by 1% year-on-year, while overseas contracts surged by 237% [8] Strategic Initiatives - The company is focusing on high-performance fibers, high-end nylon, biodegradable plastics, and other specialty chemicals to enhance its product offerings [4] - New projects in the new materials sector are expected to contribute positively to the company's revenue and operational efficiency [4]