KINGFA(SH:600143) Orient Securities·2024-10-31 09:47Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 9.12 CNY based on a 24x PE for 2024 [2][3]. Core Views - The petrochemical segment has significantly reduced losses, with a net profit attributable to the parent company of 6.8 billion CNY for the first three quarters of 2024, a year-on-year increase of 41.0%. The third quarter alone saw a net profit of 3.0 billion CNY, marking a staggering year-on-year increase of 1886.4% [1][2]. - The modified plastics business continues to grow, with sales increasing by 11% quarter-on-quarter in Q3. The company has successfully launched its Vietnam base, with a planned capacity of 600,000 tons per year, and is expanding into Poland and Mexico to enhance its global competitiveness [1][2]. - The management expresses strong confidence in long-term performance growth, supported by share buybacks and insider purchases by executives. The company is expected to stabilize its petrochemical segment while continuing to grow its modified plastics and new materials businesses [1][2]. Financial Summary - For 2024, the company forecasts a net profit of 992 million CNY, with projected growth rates of 213.2% and 63.8% for 2025 and 2026, respectively. Revenue is expected to reach 49.25 billion CNY in 2024, with a year-on-year growth of 2.7% [4][6]. - The gross margin for Q3 was reported at 10.8%, reflecting a 2.6 percentage point increase from the previous quarter, despite a significant increase in sales volume [1][4]. - The company’s total revenue for the first three quarters of 2024 was 40.46 billion CNY, with a year-on-year increase of 18.0% [1][4].