HUALU-HENGSHENG(SH:600426) Huachuang Securities·2024-10-31 16:37Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 32.62 CNY [1][4]. Core Views - The company achieved a revenue of 25.18 billion CNY in the first three quarters of 2024, representing a year-on-year increase of 30.16%. The net profit attributable to shareholders was 3.05 billion CNY, up 4.16% year-on-year [1]. - The third quarter revenue was 8.21 billion CNY, showing a year-on-year increase of 17.43% but a quarter-on-quarter decrease of 8.81%. The net profit for Q3 was 825 million CNY, down 32.27% year-on-year and 28.84% quarter-on-quarter [1][2]. - The company is focusing on optimizing costs and accelerating the transformation towards new material products, which is expected to enhance its long-term competitive edge [3]. Summary by Sections Financial Performance - In Q3 2024, the revenue from the company's four main segments was as follows: New Energy Materials (3.998 billion CNY, +8.0% YoY), Chemical Fertilizers (1.604 billion CNY, +26.1% YoY), Organic Amines (610 million CNY, -7.4% YoY), and Acetic Acid and Derivatives (1.009 billion CNY, +114.7% YoY) [2]. - The overall sales volume for Q3 was 665,000 tons, with significant increases in Chemical Fertilizers and Acetic Acid products, while the prices of certain products like butanol and urea negatively impacted revenue [2]. Operational Efficiency - The company has been optimizing its production processes to reduce consumption and enhance operational efficiency, achieving a total expense ratio of 3.71% in the first three quarters, down 0.21 percentage points from the previous year [3]. - The company is also advancing several projects, including the gas power platform and integrated projects for new materials, which are expected to contribute to future growth [3]. Future Outlook - The report adjusts the net profit forecasts for 2024-2026 to 3.941 billion CNY, 4.946 billion CNY, and 5.733 billion CNY respectively, reflecting a cautious but optimistic outlook based on current market conditions and the gradual release of new production capacity [4][5]. - The company is positioned to benefit from its strategic investments in high-end new materials, which are anticipated to support long-term high-quality development [3].