Wintrue Holding(002539) 国信证券·2024-10-28 04:12Investment Rating - The investment rating for the company is "Outperform the Market" [4][12]. Core Views - The company has shown resilient performance in its main business, with a slight decrease in revenue and net profit for the first three quarters of 2024. Revenue was 15.697 billion yuan, down 2.78% year-on-year, and net profit was 669 million yuan, down 6.36% year-on-year. However, cash flow from operating activities increased significantly by 61.97% to 834 million yuan [1][6]. - The company is enhancing its integrated layout in the phosphate and nitrogen industry chain, which is expected to reduce product costs and improve profitability in the future. The recovery of raw material prices and improved downstream demand are anticipated to support profit margins [1][12]. - The company is actively expanding its production capacity and has a leading position in the compound fertilizer market with an annual capacity of 7.2 million tons. The overall demand for compound fertilizers is expected to stabilize and potentially increase due to national policies encouraging food production [2][12]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 15.697 billion yuan, a decrease of 2.78% year-on-year, and a net profit of 669 million yuan, down 6.36% year-on-year. In Q3 2024, revenue was 4.691 billion yuan, down 13.02% year-on-year, while net profit increased by 5.93% to 215 million yuan [1][6]. - The company’s cash flow from operating activities showed a significant increase, reaching 834 million yuan, up 61.97% year-on-year [1][6]. Business Operations - The company’s main products, phosphate fertilizers, saw an increase in both production and sales, while the alkali business faced challenges due to increased upstream supply and weak downstream demand, leading to declines in both gross margin and sales volume [1][6]. - The yellow phosphorus business, which was impacted by weak demand in the first half of the year, has returned to normal operational levels since Q3 [1][6]. Market Outlook - The company is expected to benefit from a recovery in raw material prices and improved downstream demand, which will enhance profit margins. The cost pressure on compound fertilizers is easing, and theoretical gross margins are expected to recover [2][12]. - The company is also working on increasing its self-sufficiency in nitrogen and phosphorus fertilizers, which is anticipated to further improve profitability [1][11]. Earnings Forecast - The projected net profits for the company from 2024 to 2026 are 910 million yuan, 1.136 billion yuan, and 1.498 billion yuan, respectively, with corresponding EPS of 0.75 yuan, 0.94 yuan, and 1.24 yuan. The current PE ratios are 10.76, 8.59, and 6.51 for the respective years [2][12].