BAOTI(600456) 民生证券·2024-10-30 12:17Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook for future performance [1][3]. Core Views - The company reported a slight decline in revenue and net profit for the first three quarters of 2024, with revenue at 5.509 billion yuan, down 1.83% year-on-year, and net profit at 517 million yuan, down 5.97% year-on-year [1]. - The demand for military and consumer electronics (3C) orders has decreased, while aerospace-grade demand has shown steady growth, indicating a mixed demand landscape [1]. - The average price of sponge titanium has decreased significantly, impacting the company's profitability, with an average price of approximately 50,500 yuan per ton for the first three quarters, down 25.32% year-on-year [1]. - The company is expected to benefit from the recovery of overseas aerospace demand and the increasing application of titanium alloys in the 3C market, particularly with Apple's adoption of titanium frames in smartphones [1][3]. Summary by Sections Financial Performance - For Q3 2024, the company achieved revenue of 1.778 billion yuan, a decrease of 6.57% quarter-on-quarter and 6.51% year-on-year, with a net profit of 114 million yuan, down 53.38% quarter-on-quarter but up 32.64% year-on-year [1]. - The gross profit margin for the first three quarters of 2024 was 21.45%, a decline of 1.03 percentage points year-on-year, with Q3 margin at 19.47%, down 7.47 percentage points quarter-on-quarter [1]. Market Demand Analysis - The military market has seen a slowdown in procurement since the second half of 2023, but demand is stabilizing [1]. - The domestic consumer market remains weak due to insufficient capital expenditure in the chemical industry [1]. - The company has successfully entered the supply chain for major overseas clients like Boeing and Airbus, which is expected to drive growth in the aerospace-grade market [1]. Growth Potential - The company is expanding its production capacity, with plans to reach 50,000 tons of titanium processing capacity during the 14th Five-Year Plan [1]. - High-end titanium projects are gradually coming online, with expected annual increases in production of various titanium products [1]. - The company is positioned as a key supplier for the C919 aircraft, which is anticipated to boost titanium demand significantly [1]. Profit Forecast - The projected net profits for 2024, 2025, and 2026 are 563 million yuan, 660 million yuan, and 737 million yuan, respectively, with corresponding price-to-earnings ratios of 26, 22, and 20 [2][4].