SNS(300470) Southwest Securities·2024-10-29 10:31Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a revenue of 1.14 billion yuan for the first three quarters of 2024, representing a year-on-year growth of 15.6%. The net profit attributable to the parent company was 270 million yuan, up 9.2% year-on-year. In the third quarter alone, revenue reached 420 million yuan, with a year-on-year increase of 11.5% and a quarter-on-quarter increase of 8.1%. The net profit for the third quarter was 100 million yuan, reflecting a year-on-year growth of 11.9% and a quarter-on-quarter growth of 7.7% [1][2] Summary by Sections Financial Performance - The comprehensive gross margin for the first three quarters was 47.6%, down 2.6 percentage points year-on-year, primarily due to the company's strategic decision to increase the proportion of incremental business. The net profit margin was 23.8%, a decrease of 1.4 percentage points year-on-year, but the decline was less than that of the gross margin. In the third quarter, the gross margin was 48.4%, down 0.2 percentage points year-on-year but up 2.0 percentage points quarter-on-quarter. The net profit margin was 23.4%, showing a year-on-year increase of 0.2 percentage points and remaining stable quarter-on-quarter [2] Cost Management - The company achieved a significant reduction in the expense ratio, which was 20.1% for the first three quarters, down 2.5 percentage points year-on-year. The management of sales, administrative, research and development, and financial expenses showed good control, with respective year-on-year changes of -0.6, -0.7, -1.2, and 0.0 percentage points [2] Market Strategy - In a shrinking existing market, the company is actively expanding its incremental customer base. The slowdown in capital expenditure in the downstream petrochemical sector has intensified market competition, impacting the company's existing business. However, the company is optimistic about future growth as it converts incremental customers into existing ones, especially with the expected recovery in the petrochemical industry [3] Industry Outlook - The acceleration of equipment upgrades in the petrochemical sector is anticipated to create additional demand for the company. Recent government initiatives aimed at promoting large-scale equipment updates and technological renovations are expected to benefit the company, which is positioned as a leading player in the domestic market [3] Profit Forecast and Investment Advice - The company is projected to achieve net profits of 405 million yuan, 481 million yuan, and 555 million yuan for the years 2024, 2025, and 2026, respectively, corresponding to EPS of 1.94, 2.31, and 2.66 yuan. The forecast indicates a compound annual growth rate of 17% in net profit over the next three years, supporting the "Buy" rating [3][5]