HONGLU(002541) Tianfeng Securities·2024-10-30 09:02Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [4][6]. Core Views - The company experienced a decline in gross profit margin, impacting overall performance, but there is optimism regarding a recovery in steel prices, which is expected to improve net profit per ton [1][2][4]. - The company’s revenue for the first three quarters of 2024 was 15.89 billion, a year-on-year decrease of 6.4%, with net profit attributable to the parent company at 655 million, down 26.3% year-on-year [1]. - The report anticipates that the company will produce approximately 4.5 million tons of steel in 2024, with a stable production output and potential recovery in net profit per ton due to rising steel prices [4][2]. Financial Performance Summary - For Q3 2024, the company reported revenue of 5.56 billion, a decrease of 5.7% year-on-year, with net profit attributable to the parent company at 228 million, down 32.4% year-on-year [1]. - The gross profit margin for the first three quarters of 2024 was 10.2%, a decline of 1.05 percentage points year-on-year, while Q3's gross profit margin was 9.21%, down 3.11 percentage points year-on-year [2][3]. - The company’s R&D expenses for Q3 2024 were 176 million, a decrease of 21.1% year-on-year, indicating a reduction in R&D spending per ton [2][3]. Financial Forecasts - The projected revenue for 2024 is approximately 22.78 billion, reflecting a year-on-year decrease of 3.22%, with net profit expected to be 879 million, a significant drop of 25.45% [5][8]. - The report provides a detailed financial outlook, including EBITDA and profit margins, with expected improvements in subsequent years [5][9]. Market Conditions - The report highlights that the monetary policy adjustments and fiscal stimulus are likely to positively impact infrastructure investment, which could benefit the company [4]. - Steel prices have shown signs of recovery, with hot-rolled coil prices stabilizing around 3,600 yuan per ton, up 7.65% since October compared to Q3 [2][4].