STL(SZ:002648) Huaxin Securities·2024-10-23 12:12Investment Rating - The report maintains a "Buy" investment rating for the company [6] Core Views - The company's profitability improved in Q3 2024, with new materials opening growth opportunities [2] - The company achieved a total revenue of 32.275 billion yuan in the first three quarters of 2024, a year-on-year increase of 0.71%, and a net profit attributable to shareholders of 3.693 billion yuan, up 7.64% year-on-year [2][3] Summary by Sections Financial Performance - In Q3 2024, the company reported a single-quarter revenue of 12.875 billion yuan, a year-on-year increase of 9.89% and a quarter-on-quarter increase of 21.51%. The net profit attributable to shareholders for Q3 was 1.637 billion yuan, up 2.08% year-on-year and 58.36% quarter-on-quarter [2][3] Price Trends and Profitability - The decline in ethane prices led to an expansion in the price spread of ethylene and other products. The average price of natural gas in the U.S. for Q3 was $2.24 per million British thermal units, down 3.39% quarter-on-quarter, while the average price of ethane was $115.96 per ton, down nearly $26. The profit from ethylene production via ethane cracking was 3,905 yuan per ton, an increase of 213 yuan quarter-on-quarter [3] Financial Costs and Cash Flow - Financial expenses increased by 92.48% year-on-year, primarily due to foreign exchange losses. However, the company's operating cash flow net amount increased by 1.15 billion yuan year-on-year, highlighting its financial stability [4] Strategic Developments - The company is extending its industrial chain towards new materials, having commenced construction of the first high-end new materials industrial park for α-olefin comprehensive utilization in China. The new process for producing 1-butene has been evaluated positively, indicating potential for raw material import substitution [5] Profit Forecast - The company is projected to achieve net profits of 5.8 billion yuan, 7 billion yuan, and 8.9 billion yuan for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings ratios of 11, 9, and 7 times [6]