Huafon Spandex(002064)2024-10-27 06:45Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook compared to the market [4]. Core Views - The company's Q3 2024 performance met expectations, with a revenue of 20.37 billion yuan, a year-on-year increase of 4%, and a net profit of 2.02 billion yuan, also up 4% year-on-year [4]. - The report highlights that while the price of spandex continues to decline, the price spread remains stable, suggesting a potential recovery in Q4 2024 as industry production slows down [4]. - The company is recognized as a leading player in the global spandex, adipic acid, and polyurethane raw materials market, with significant scale, technology, and cost advantages [4]. Financial Summary - For Q3 2024, the company reported a revenue of 6.63 billion yuan, down 6% year-on-year and quarter-on-quarter, with a net profit of 496 million yuan, reflecting a 13% decline year-on-year and a 41% decline quarter-on-quarter [4]. - The gross margin for Q3 2024 was 13.69%, down 0.58 percentage points year-on-year, while the net margin was 7.53%, down 0.55 percentage points year-on-year [4]. - The report projects a decrease in the company's net profit forecast for 2024 to 2.63 billion yuan from a previous estimate of 3.05 billion yuan, while maintaining profit forecasts for 2025 and 2026 at 3.81 billion yuan and 4.77 billion yuan, respectively [4][5]. Market Data - As of October 25, 2024, the company's closing price was 8.10 yuan, with a market capitalization of 40.11 billion yuan [2]. - The company has a price-to-earnings ratio (PE) of 15X for 2024, 11X for 2025, and 8X for 2026, indicating a favorable valuation compared to its earnings growth [5]. Industry Outlook - The report anticipates that the spandex industry will see a tightening supply-demand situation as production capacity slows down, which may lead to a recovery in profitability for the company [4]. - The adipic acid segment is expected to face short-term pressure but is projected to recover in Q4 2024 as industry operating rates decline [4].