BAOFENG ENERGY(600989) KAIYUAN SECURITIES·2024-10-31 08:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has released its Q3 2024 report, showing a revenue of 24.27 billion yuan, a year-on-year increase of 19%, and a net profit attributable to shareholders of 4.54 billion yuan, up 16.6% year-on-year. The report indicates a decline in Q3 revenue and net profit compared to the previous quarter due to a decrease in polyolefin production and average selling prices [2][3] - The report anticipates a stable release of production capacity and benefits from a decrease in coal prices, with significant contributions expected from the Inner Mongolia and Xinjiang projects, leading to high growth potential in future performance [2][3] Summary by Relevant Sections Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 24.27 billion yuan, a year-on-year increase of 19%, and a net profit of 4.54 billion yuan, up 16.6% year-on-year. The adjusted net profit was 4.91 billion yuan, reflecting an 18.4% increase year-on-year. In Q3 alone, revenue was 7.38 billion yuan, down 14.9% quarter-on-quarter, and net profit was 1.23 billion yuan, down 34.6% quarter-on-quarter [2][3] - The average selling prices for polyethylene and polypropylene in the first three quarters of 2024 were 7,082.1 yuan/ton and 6,710.5 yuan/ton, respectively, showing a slight decrease compared to the previous year [2][3] Production and Capacity - Polyethylene production and sales for the first three quarters of 2024 were 817,000 tons and 826,000 tons, respectively, representing increases of 48.8% and 53.7% year-on-year. Polypropylene production and sales were 832,000 tons and 824,000 tons, with year-on-year increases of 68% and 70.3% [2][3] - The Ningdong Phase III project has been steadily releasing production since its trial operation began in September 2023, and the Inner Mongolia Phase I project is expected to complete mechanical construction by the end of 2024 [2][3] Future Outlook - The company has adjusted its profit forecasts for 2024-2026, expecting net profits of 6.36 billion yuan, 10.95 billion yuan, and 12.12 billion yuan, respectively, with year-on-year growth rates of 12.5%, 72.3%, and 10.7% [2][3] - The company plans to leverage low-cost raw coal in Xinjiang for a new 4 million tons/year coal-to-olefins project, which is expected to significantly enhance its production capacity [2][3]