HYPC(000703) CICC·2024-10-29 21:35Investment Rating - The report maintains an "Outperform" rating for the company with a target price of RMB 7.30, indicating a potential upside of 14% from the current price of RMB 6.40 [1]. Core Views - The company's performance in Q3 2024 was below expectations, with a revenue of RMB 948 million, down 7% year-on-year, and a net profit of RMB 230 million, which was a 12% increase but still lower than anticipated. The Q3 revenue alone was RMB 301 million, reflecting a 19% decline year-on-year, and a net loss of RMB 20 million [4]. - The long filament industry is expected to see improved competitive dynamics post-2025, with controlled supply growth, which may lead to a more orderly development phase [5]. - The decline in oil prices has resulted in inventory losses, putting pressure on long filament profitability. However, prices have stabilized since Q4 2024, and profitability is expected to improve in early 2025 as the company resumes operations [5][6]. Financial Summary - The company reported a revenue of RMB 152,050 million in 2022, which decreased to RMB 136,148 million in 2023, but is projected to rise to RMB 222,636 million in 2024, reflecting a growth rate of 63.5% [3]. - The net profit attributable to the parent company was a loss of RMB 1,080 million in 2022, turning to a profit of RMB 435 million in 2023, with expectations of RMB 524 million in 2024 and RMB 712 million in 2025 [3][10]. - The company plans to repurchase shares worth between RMB 1.25 billion and RMB 2.5 billion, indicating management's confidence in the company's undervalued stock [6].