Yuanxing Energy(000683) KAIYUAN SECURITIES·2024-10-30 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Views - The company has reported a significant increase in Q3 investment income, with performance exceeding expectations. For the first three quarters of 2024, the company achieved operating revenue of 10.372 billion yuan, a year-on-year increase of 29.04%, and a net profit attributable to shareholders of 1.805 billion yuan, a year-on-year increase of 19.84% [4] - In Q3 alone, the company recorded operating revenue of 3.303 billion yuan, a quarter-on-quarter decrease of 12.84%, and a net profit of 596 million yuan, a slight quarter-on-quarter decline of 6.94%. The performance was supported by steady growth in the production and sales of the Alashan natural soda project and a significant increase in investment income [4][5] - Despite a decline in soda ash prices, the company maintains its profit forecasts for 2024-2026, expecting net profits of 2.721 billion, 2.733 billion, and 3.079 billion yuan, respectively, with corresponding EPS of 0.73, 0.73, and 0.83 yuan. The current stock price corresponds to P/E ratios of 9.1, 9.1, and 8.1 times [4] Summary by Sections Financial Performance - For Q3 2024, the average price of soda ash decreased, with heavy and light soda ash prices at 1,837 yuan/ton and 1,617 yuan/ton, respectively, down 13.54% and 18.48% quarter-on-quarter. Despite a seasonal decline in industry operating rates, the company’s production and sales have steadily increased due to the Alashan project [5] - The company’s inventory increased from 865,400 tons at the end of Q2 to 1,455,600 tons by the end of September, marking a 68.2% increase [5] Project Development - The first phase of the Alashan natural soda project has reached production capacity, and the second phase has commenced construction, expected to be completed by December 2025. This development is anticipated to further enhance the company's growth potential [6] Financial Projections - The company’s projected operating revenues for 2024, 2025, and 2026 are 15.32 billion, 16.701 billion, and 17.482 billion yuan, respectively, with corresponding net profits of 2.721 billion, 2.733 billion, and 3.079 billion yuan. The gross margin is expected to be around 38.9% in 2024, with net margins improving to 21.7% [7][8]