CHANGHAI(300196) Tianfeng Securities·2024-10-28 08:09Investment Rating - The report maintains a "Buy" rating for the company with a target price of 14.55 CNY, based on a 20x PE for 2024 [4][6]. Core Insights - The company achieved a net profit of 0.80 million CNY in Q3, reflecting a year-on-year increase of 3.83%. However, the revenue for the first three quarters decreased by 4.30% year-on-year [1]. - The gross margin showed signs of recovery, with Q3 gross margin at 24.45%, up 0.40 percentage points year-on-year [3]. - The company has successfully launched new production capacity, with a 15,000-ton production line in Changzhou starting operations in late August [2]. Financial Performance Summary - For the first three quarters, the company reported revenues of 190.3 million CNY and a net profit of 20.2 million CNY, with a significant decline in net profit of 29.68% year-on-year [1]. - The Q3 revenue was 67.9 million CNY, showing a slight decrease of 0.25% year-on-year, while the net profit increased by 3.83% [1]. - The overall gross margin for the first three quarters was 23.39%, down 2.79 percentage points year-on-year, but improved in Q3 [3]. - The company’s operating cash flow for the first three quarters was 153 million CNY, a decrease of 36.7 million CNY year-on-year [3]. Production Capacity and Market Outlook - The company has a total production capacity of 390,000 tons per year, with ongoing expansion plans [2]. - The demand recovery in the domestic market and overseas restocking needs are expected to provide significant growth potential for the company [2]. - The report anticipates an increase in gross profit margins due to a decrease in raw material costs, particularly oil prices [2].