BAOFENG ENERGY(SH:600989) Guohai Securities·2024-11-02 15:41Investment Rating - The investment rating for Baofeng Energy (600989) is maintained at "Buy" [2][8][34] Core Views - The company's revenue for the first three quarters of 2024 reached 24.275 billion yuan, a year-on-year increase of 18.99%, while net profit attributable to shareholders was 4.537 billion yuan, up 16.60% year-on-year [2] - The third quarter of 2024 saw a revenue of 7.377 billion yuan, a slight year-on-year increase of 0.91% but a significant quarter-on-quarter decrease of 14.91% [3] - The decline in performance in Q3 was primarily due to a decrease in the production and sales of olefins and EVA, as well as a drop in product prices influenced by falling crude oil prices [3][5] Summary by Sections Financial Performance - For Q3 2024, Baofeng Energy reported a net profit of 1.232 billion yuan, down 24.60% year-on-year and 34.59% quarter-on-quarter [3] - The company's gross profit margin for Q3 was 34.12%, a decrease of 0.30 percentage points year-on-year and 4.11 percentage points quarter-on-quarter [3] - The average return on equity (ROE) for Q3 was 3.03%, down 1.52 percentage points year-on-year and 1.68 percentage points quarter-on-quarter [3] Production and Sales - In Q3 2024, the production of polyethylene was 248,600 tons, a year-on-year increase of 35,300 tons but a quarter-on-quarter decrease of 32,800 tons [3] - Polypropylene production reached 256,900 tons, up 77,900 tons year-on-year but down 43,700 tons quarter-on-quarter [3] - The EVA production was 29,300 tons, down 24,600 tons quarter-on-quarter [3] Market Conditions - The average price of polyethylene in Q3 2024 was 8,352 yuan/ton, showing a year-on-year decrease of 0.01% and a quarter-on-quarter decrease of 2.08% [3][12] - The average price of polypropylene was 7,774 yuan/ton, up 2.48% year-on-year but down 1.16% quarter-on-quarter [3][12] - The average price of coke was 1,627 yuan/ton, down 14.29% year-on-year and 7.25% quarter-on-quarter [3][12] Future Outlook - The company is set to benefit from the upcoming commissioning of its Inner Mongolia project, which is expected to enhance its total olefin production capacity to 5.2 million tons per year, solidifying its position as a leader in the coal-to-olefin industry [5][8] - The projected revenues for 2024, 2025, and 2026 are 34 billion, 54.5 billion, and 58.7 billion yuan respectively, with net profits expected to be 6.5 billion, 13.6 billion, and 17.1 billion yuan [8][34]