Cathay Biotech (688065) Huachuang Securities·2024-11-01 03:40Investment Rating - The report maintains a "Strong Buy" rating for the company, indicating an expectation to outperform the benchmark index by over 20% in the next six months [1][15]. Core Insights - The company reported a revenue of 2.215 billion yuan for the first three quarters of 2024, representing a year-on-year increase of 41.49%. The net profit attributable to shareholders reached 345 million yuan, up 9.97% year-on-year, while the net profit excluding non-recurring items was 335 million yuan, reflecting a 25.51% increase [1]. - The new production capacity for sebacic acid has contributed to improved profit margins, with a gross margin of 32.20% for the first three quarters, an increase of 3.72 percentage points year-on-year [1]. - The company has increased its R&D investment, with R&D expenses amounting to 169 million yuan in the first three quarters, a 33.52% increase year-on-year, representing 7.62% of revenue [1]. - Collaborations with partners like China Merchants Group are yielding positive results, accelerating the commercialization of bio-based polyamide composite materials [1]. - The company plans to repurchase shares worth 10 to 20 million yuan, reflecting confidence in its governance structure and long-term incentive mechanisms [1]. Financial Summary - For 2024, the company is projected to achieve total revenue of 3.189 billion yuan, a growth rate of 50.9% compared to 2023. The net profit is expected to be 457 million yuan, with a growth rate of 24.8% [3]. - The earnings per share (EPS) for 2024 is estimated at 0.78 yuan, with a price-to-earnings (P/E) ratio of 60 [3]. - The company’s total assets are projected to reach 20.057 billion yuan by 2024, with a debt-to-asset ratio of 18.23% [4].