Huafon Spandex(SZ:002064) EBSCN·2024-10-30 07:47Investment Rating - The report maintains a "Buy" rating for the company with a current price of 8.11 CNY [2] Core Views - The company's Q3 performance was under pressure due to the downturn in adipic acid prices, with a year-on-year revenue increase of 4% for the first three quarters of 2024, totaling 20 billion CNY, while Q3 alone saw a revenue decline of 6% year-on-year [3][4] - The company is a leading player in the global market for spandex, adipic acid, and polyurethane, with significant production capacity and ongoing expansion projects [4] - The company is enhancing its industrial chain layout, including a 30,000-ton differentiated spandex project and a 1.1 million-ton integrated natural gas project, which are expected to strengthen its competitive position [4] Summary by Sections Financial Performance - For Q3 2024, the company reported a revenue of 66 billion CNY, down 6% year-on-year, and a net profit of 5 billion CNY, down 13% year-on-year [3] - The company’s revenue for 2024 is projected to be 29.69 billion CNY, with a net profit of 2.67 billion CNY, reflecting a 7.51% increase [6][7] Production Capacity - As of Q3 2024, the company has a spandex production capacity of 325,000 tons, adipic acid capacity of 1,355,000 tons, and polyurethane capacity of 520,000 tons [4] - The company is investing 8 billion CNY to expand its spandex production capacity, with a total investment of 28.4 billion CNY for the project [4] Market Position - The company holds a significant market share in spandex, adipic acid, and polyurethane, with production volumes ranking first in China and among the top globally [4] - The report anticipates a recovery in spandex margins due to improving downstream demand, which may lead to profit recovery in Q4 2024 [3][4]