Cathay Biotech (688065) 长城证券·2024-11-08 01:18Investment 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 [17]. Core Views - The company's performance in Q3 2024 shows significant year-on-year improvement, driven by the ramp-up of new production capacity for sebacic acid, leading to enhanced profitability [2][4]. - The overall sales gross margin for the first three quarters of 2024 was 32.20%, an increase of 3.72 percentage points compared to the same period in 2023 [2]. - The company is expanding its biomanufacturing capabilities, with a focus on new bio-based materials, positioning itself as a global leader in the production of long-chain dicarboxylic acids [4][6]. Financial Summary - For the first three quarters of 2024, the company reported operating revenue of 2.215 billion yuan, a year-on-year increase of 41.49%, and a net profit attributable to shareholders of 345 million yuan, up 9.97% year-on-year [1]. - The revenue for Q3 2024 was 771 million yuan, reflecting a year-on-year growth of 44.06% [1]. - The net profit for Q3 2024 was 98 million yuan, showing a year-on-year increase of 35.69% [1]. - The company’s cash flow from operating activities for the first three quarters of 2024 was 676 million yuan, a year-on-year increase of 27.48% [3]. - The company’s total assets amounted to 17.827 billion yuan as of 2022, with a total liability of 2.789 billion yuan [9]. Production Capacity and Market Position - The company has a production capacity of 115,000 tons per year for its series of biotechnological long-chain dicarboxylic acids, with significant production of sebacic acid contributing to revenue growth [4]. - The company is collaborating with China Merchants Group to develop projects for the production of bio-based materials, which is expected to enhance its market share and profitability [6][7]. Future Projections - The company is projected to achieve operating revenues of 3.126 billion yuan, 5.265 billion yuan, and 7.130 billion yuan for the years 2024, 2025, and 2026, respectively [7]. - The expected net profits for the same years are 483 million yuan, 698 million yuan, and 914 million yuan, respectively [7].