wanhua(SH:600309) SINOLINK SECURITIES·2024-10-30 01:41Investment Rating - The report maintains a "Buy" rating for the company [1][2]. Core Views - The company reported a revenue of 147.604 billion RMB for the first three quarters of 2024, representing a year-on-year increase of 11.35%. However, the net profit attributable to the parent company was 11.093 billion RMB, down 12.67% year-on-year. In Q3 alone, the company achieved a revenue of 5.054 billion RMB, up 12.48% year-on-year, but the net profit dropped 29.41% to 2.918 billion RMB, aligning with expectations [1]. - The overall business remains stable, although financial and income tax expenses have increased. Sales expenses rose by 16.83% to 1.166 billion RMB, management expenses increased by 26.20% to 2.187 billion RMB, and financial expenses surged by 43.07% to 1.694 billion RMB, primarily due to increased interest expenses from rising interest-bearing liabilities. R&D expenses also grew by 26.14% to 2.186 billion RMB, indicating a commitment to high-level R&D investment for long-term technological foundations [1]. - The prices of major products have declined while raw material prices have risen, leading to a narrowing of profit margins. The average market price for pure MDI products in Q3 was around 19,500 RMB/ton, while for aggregated MDI products, it was approximately 17,800 RMB/ton. TDI products saw an average market price of 13,500 RMB/ton, and soft foam polyether products averaged 8,700 RMB/ton. The overall price level for petrochemical products in Q3 compared to the same period last year has shifted downward, resulting in reduced industry chain profits [1]. - The report projects the company's net profits for 2024-2026 to be 16.205 billion RMB (-10.28%), 20.951 billion RMB (+2.7%), and 22.925 billion RMB (+4.5%), respectively, with corresponding EPS of 5.16, 6.67, and 7.30 RMB/share. The current market capitalization corresponds to P/E ratios of 14.52X, 11.23X, and 10.26X for the respective years [2]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 147.604 billion RMB, with a year-on-year growth of 11.35%. The net profit attributable to the parent company was 11.093 billion RMB, down 12.67% year-on-year [1]. - In Q3 2024, the company reported a revenue of 5.054 billion RMB, up 12.48% year-on-year, while the net profit was 2.918 billion RMB, down 29.41% [1]. Expense Analysis - Sales expenses increased by 16.83% to 1.166 billion RMB, management expenses rose by 26.20% to 2.187 billion RMB, and financial expenses surged by 43.07% to 1.694 billion RMB due to increased interest expenses [1]. - R&D expenses grew by 26.14% to 2.186 billion RMB, reflecting a commitment to sustained high-level R&D investment [1]. Product Pricing and Market Conditions - Major product prices have declined, with pure MDI products averaging 19,500 RMB/ton, aggregated MDI products at 17,800 RMB/ton, TDI products at 13,500 RMB/ton, and soft foam polyether products at 8,700 RMB/ton [1]. - The overall price level for petrochemical products has shifted downward compared to the previous year, leading to reduced industry chain profits [1]. Profit Forecast - The projected net profits for 2024-2026 are 16.205 billion RMB (-10.28%), 20.951 billion RMB (+2.7%), and 22.925 billion RMB (+4.5%), with corresponding EPS of 5.16, 6.67, and 7.30 RMB/share [2].