Yuanxing Energy(000683) Huachuang Securities·2024-10-29 10:41Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 8.55 CNY [1]. Core Views - The company's Q3 performance exceeded market expectations, with revenue of 3.303 billion CNY, a year-on-year increase of 23.13%, and a net profit attributable to shareholders of 596 million CNY, up 31.30% year-on-year [1]. - The increase in profits is attributed to the natural soda ash segment, despite a weakening price trend in the pure soda market [1]. - The company has made significant progress in its projects, with the first phase of the natural soda project achieving stable operations and the second phase under construction [1]. Financial Summary - For 2023, total revenue is projected at 12.044 billion CNY, with a year-on-year growth rate of 9.6%. The net profit attributable to shareholders is expected to be 1.41 billion CNY, reflecting a decline of 47% [2]. - The company forecasts a net profit of 2.071 billion CNY for 2024, representing a growth of 46.9% year-on-year [2]. - The earnings per share (EPS) for 2024 is estimated at 0.55 CNY, with a price-to-earnings (P/E) ratio of 12 [2]. Operational Insights - The company’s sales gross margin for Q3 was 38.95%, with a net profit margin of 25.66% [1]. - Investment income from joint ventures increased significantly, primarily due to the performance of the subsidiary Mengda Mining [1]. - The company has a total asset balance of 34.094 billion CNY, with a debt-to-asset ratio of 44.01% [3]. Project Developments - The first phase of the 5 million tons per year soda ash project has achieved stable operations, and the second phase is under construction [1]. - The company has secured water rights of 10 million cubic meters per year to support its production needs [1]. Market Position - The company is positioned as a leader in the industry, with expectations of continued growth driven by capacity expansion and cost advantages [1].