AHB(688639) Great Wall Securities·2024-11-05 11:36Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index within the next six months [18]. Core Views - The company's revenue for the first three quarters of 2024 was CNY 1.539 billion, a year-on-year increase of 12.82%, while the net profit attributable to shareholders decreased by 46.90% to CNY 170 million [1][2]. - The decline in net profit is primarily attributed to the drop in the price of valine products and increased operational costs due to the company's expanding scale [2]. - The company is diversifying its product matrix, with new products such as 1,3-propanediol, succinic acid, and others set to launch, which is expected to mitigate the impact of declining prices of core products [4][10]. Financial Summary - For 2024, the company is projected to achieve revenues of CNY 2.46 billion, with a net profit of CNY 259 million, reflecting a significant decrease in profitability compared to previous years [1][10]. - The gross profit margin for the first three quarters of 2024 was 28.13%, down 13.16 percentage points year-on-year, indicating pressure on profitability [2]. - The company's cash flow from operating activities decreased by 71.73% year-on-year to CNY 105 million, primarily due to increased cash payments for goods and services [3]. Market Position and Product Development - The average market prices for valine and myo-inositol in Q3 2024 were CNY 13.66 and CNY 46.86 per kilogram, respectively, showing significant year-on-year declines of 34.07% and 67.24% [4]. - The company has established a leading position in the industry with its large-scale production of fermentation-based L-valine, which is expected to maintain market share and sales growth despite price pressures [4]. - The establishment of the "Biobased Polyester Textile Industry Alliance" aims to enhance collaboration across the PDO-PTT supply chain, promoting domestic production and innovation [8]. Future Outlook - The company is expected to recover its performance as new products are launched and production capacity is expanded, with projected revenues of CNY 3.477 billion and CNY 4.613 billion for 2025 and 2026, respectively [10]. - The ongoing trends in the amino acid market, driven by the demand for alternatives to soybean meal, are anticipated to further boost the demand for the company's products [7].