Hoshine Silicon(603260) KAIYUAN SECURITIES·2024-10-31 14:42Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown a slight quarter-on-quarter revenue growth in Q3, and there is optimism regarding the gradual recovery of profitability in the silicon industry [2] - The company reported a total revenue of 20.371 billion yuan for the first three quarters of 2024, a year-on-year increase of 2.44%, while the net profit attributable to shareholders was 1.454 billion yuan, a year-on-year decrease of 33.42% [2] - In Q3 2024, the company achieved a revenue of 7.099 billion yuan, a year-on-year decrease of 10.68% and a quarter-on-quarter decrease of 9.63%, with a net profit of 476 million yuan, a year-on-year increase of 18.42% and a quarter-on-quarter increase of 5.82% [2] - The company expects the profitability of its main products, including industrial silicon and organic silicon, to gradually recover as the industry cycle reaches its bottom [2] Financial Summary - For 2024, the company’s projected net profit is 2.153 billion yuan, with earnings per share (EPS) of 1.82 yuan, and a price-to-earnings (P/E) ratio of 32.6 times [3] - The company’s revenue is expected to grow from 28.460 billion yuan in 2024 to 40.196 billion yuan in 2026, with a compound annual growth rate (CAGR) of 16.1% [3] - The gross margin is projected to be 17.9% in 2024, improving to 20.5% by 2025 and 2026 [3] - The company’s total assets are expected to increase from 87.950 billion yuan in 2024 to 106.865 billion yuan in 2026 [4] Industry Insights - The company is actively expanding its projects in the photovoltaic sector, including 400,000 tons/year of polysilicon and 20 GW/year of modules [2] - The photovoltaic industry is taking steps to strengthen self-discipline and prevent "involution" or vicious competition, which may lead to a turning point in profitability for the industry [2]