Flat(601865) Huachuang Securities·2024-11-03 15:07Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 30.93 CNY, compared to the current price of 26.48 CNY [1][2]. Core Views - The company's performance in Q3 2024 was under pressure due to a phase of supply-demand imbalance in the industry, with revenue declining by 8.06% year-on-year to 14.604 billion CNY and net profit decreasing by 34.18% to 1.296 billion CNY [1][2]. - The average price of photovoltaic glass has decreased significantly, impacting the company's profitability, with a reported average price of 13.67 CNY/sqm for 2.0mm coated glass, down 22% from the previous quarter [2]. - The company has a stable production and sales structure, with nominal production capacity reaching 23,000 t/d and in-production capacity around 20,000 t/d [2]. - The industry is experiencing a slowdown in new capacity additions and an acceleration in cold repairs, indicating a potential near-term bottom for the photovoltaic glass segment [2]. - The company is expected to face continued pressure on profitability due to declining glass prices, leading to adjusted profit forecasts for 2024-2026 [2]. Financial Summary - For the first three quarters of 2024, the company reported total revenue of 14.604 billion CNY, a decrease of 8.06% year-on-year, and a net profit of 1.296 billion CNY, down 34.18% [1][3]. - The gross margin for Q3 2024 was 19.02%, a decline of 2.21 percentage points year-on-year, while the net profit margin was 8.87%, down 3.52 percentage points year-on-year [1]. - The forecasted net profits for 2024, 2025, and 2026 are 1.139 billion CNY, 2.416 billion CNY, and 3.166 billion CNY, respectively, with corresponding P/E ratios of 54, 26, and 20 [3][2].