Huafon Spandex(002064) Huaan Securities·2024-10-27 15:05Investment Rating - Investment Rating: Buy (Maintain) [1] Core Views - The report highlights that the demand for spandex and adipic acid is weak, leading to insufficient cost support and pressure on profitability [1] - The spandex supply-demand imbalance has caused continuous price declines, with current market conditions at historical lows [1] - The report anticipates that spandex prices may gradually recover starting in 2026 as capacity expansion slows down [1] - The company has achieved incremental contributions from new spandex capacity, demonstrating strong profitability resilience compared to peers [1] - Due to weaker-than-expected market demand in Q3, the profit forecast has been revised downwards for 2024-2026 [1] Financial Performance Summary - For the first three quarters of 2024, the company reported revenue of 20.373 billion yuan, a year-on-year increase of 3.51%, and a net profit attributable to shareholders of 2.015 billion yuan, up 4.46% year-on-year [1] - In Q3 alone, the company achieved revenue of 6.629 billion yuan, down 6.1% year-on-year and 6.5% quarter-on-quarter, with a net profit of 496 million yuan, reflecting a year-on-year increase of 12.9% but a significant quarter-on-quarter decline of 40.5% [1] - The report projects net profits for 2024, 2025, and 2026 to be 2.649 billion, 3.594 billion, and 4.883 billion yuan respectively, with corresponding P/E ratios of 15.17, 11.19, and 8.23 [1][3] Industry Insights - The report notes that the average price of spandex's main raw material, PTMEG, has continued to decline, further dragging down the spandex market [1] - The average operating rate for adipic acid in Q3 was around 60%, with prices continuing to decrease, leading to a narrowing of profit margins [1] - The industry landscape for adipic acid is stable, with the top three producers being Huafeng Group, Haili Chemical, and Pingmei Shenma [1]