Chanhen(SZ:002895)2024-10-29 00:47Investment Rating - The report maintains an "Outperform" rating for Guizhou Chanhen Chemical [1][8][4] Core Insights - The recurring net profit for the first three quarters of 2024 increased by 31.63% year-on-year, driven by rising prices of main products [4][5] - The company achieved operating revenue of RMB 3.973 billion in the first three quarters of 2024, representing a year-on-year increase of 29.36% [4][8] - In Q3 2024, the company reported operating revenue of RMB 1.489 billion, a quarter-on-quarter increase of 3.39% and a year-on-year increase of 24.98% [4][8] - The gross profit margin and net profit margin showed significant improvement, with gross profit margins of 33.83%, 32.77%, and 38.74% for Q1 to Q3 2024, and net profit margins of 11.88%, 15.36%, and 21.86% respectively [4][8] Financial Performance Summary - The company expects net profits for 2024, 2025, and 2026 to be RMB 966 million, RMB 1.231 billion, and RMB 1.465 billion respectively, with corresponding EPS of RMB 1.78, RMB 2.27, and RMB 2.70 [8][3] - The target price is set at RMB 24.92, based on a 14x P/E ratio for 2024 [8][3] - The company’s revenue is projected to grow from RMB 4.32 billion in 2023 to RMB 7.47 billion in 2026, with a consistent increase in net profit margins [3][8] Product Pricing and Market Position - As of October 25, 2024, the price of phosphate rock was RMB 1,037.50 per tonne, phosphoric acid at RMB 6,810.00 per tonne, and di-calcium phosphate at RMB 2,750.00 per tonne, reflecting significant price increases [5][6] - The widening spread of dihydrogen phosphate is noted, with an average price spread of RMB 775.00 per tonne, up RMB 217.49 per tonne compared to the previous quarter [5][6] Resource Development and Projects - The company has secured phosphate rock resources with a production capacity of 3 million tonnes/year, achieving self-sufficiency [6][7] - Ongoing projects include a new energy material recycling project and various phosphoric acid concentration projects, with progress reported as of June 30, 2024 [7][6]