BAOFENG ENERGY(600989) 国泰君安·2024-11-06 17:05Investment Rating - The report maintains an "Accumulate" rating for Baofeng Energy (600989) with a target price adjusted to 19.69 CNY from the previous 21.00 CNY [1][4]. Core Views - The company's Q3 performance was slightly below expectations due to maintenance and oil price fluctuations impacting profitability, but the growth potential remains strong with significant capacity expansion projects underway [2][4]. - The report highlights that the company achieved a revenue of 24.275 billion CNY in the first three quarters of 2024, representing an 18.99% year-on-year increase, while net profit reached 4.537 billion CNY, up 16.60% year-on-year [4]. - Q3 revenue was reported at 7.377 billion CNY, a 0.90% year-on-year increase but a 24.60% decrease in net profit compared to the same quarter last year [4]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company reported a revenue of 24.275 billion CNY, with a year-on-year growth of 18.99%, and a net profit of 4.537 billion CNY, reflecting a 16.60% increase [4]. - In Q3 2024, the company generated revenue of 7.377 billion CNY, which is a 0.90% increase year-on-year, but net profit fell to 1.232 billion CNY, down 24.60% year-on-year [4]. Market Conditions - The report notes that the domestic apparent consumption of polyolefins in the first half of 2024 was 37.06 million tons, a 3.3% increase year-on-year, indicating a steady demand growth for polyolefins [4]. - The cost advantage of coal-based olefins is highlighted, with coal-based polyethylene being approximately 2200 CNY per ton more profitable than oil-based polyethylene as of June 2024 [4]. Project Developments - The Inner Mongolia Phase I project is on track for trial production, and the Ningdong Phase IV olefin project is set to commence soon. Additionally, a new materials project in Xinjiang is in the environmental assessment phase, which is expected to enhance future profitability [4].