Asia-Potash(SZ:000893) Guotai Junan Securities·2024-10-31 06:52Investment Rating - The report maintains a rating of "Accumulate" for the company [2][4]. Core Views - The company's third-quarter performance showed a slight improvement in gross margin and a significant increase in net margin, indicating substantial cost reduction and efficiency enhancement potential [4]. - The geopolitical situation has eased, and potash prices remain low, prompting a downward revision of profit forecasts for 2024-2026, with expected EPS of 0.76, 0.99, and 1.27 yuan respectively [4]. - The target price has been raised to 23.22 yuan from the previous 18.85 yuan, reflecting a PE ratio of 29.1 times for the company, which is considered favorable given the expected production capacity elasticity [4]. Financial Summary - For the first three quarters of 2024, the company reported revenue of 2.483 billion yuan, a year-on-year decrease of 14.13%, and a net profit of 518 million yuan, down 47.89% year-on-year [4]. - In Q3 alone, revenue was 785 million yuan, down 9.71% year-on-year and 26.27% quarter-on-quarter, with a net profit of 248 million yuan, down 10.71% year-on-year but up 31.46% quarter-on-quarter [4]. - The gross margin for Q3 was 49.26%, up 2.60 percentage points quarter-on-quarter, while the net margin was 30.67%, up 13.58 percentage points quarter-on-quarter [4]. Production and Capacity - The company’s potash production and sales in Q3 were 478,600 tons and 380,400 tons respectively, with a quarter-on-quarter increase in production but a decrease in sales [4]. - The entry of Huineng Group as a shareholder is expected to invigorate the company's mineral resource development, with potential daily production capacity reaching 8,000 to 9,000 tons upon the operation of new shafts [4].