HAINAN RUBBER GROUP(601118) 国信证券·2024-11-24 04:40Investment Rating - The report assigns an "Outperform" rating to Hainan Rubber (601118 SH) [1][4] Core Views - Hainan Rubber benefits from the recovery in rubber prices, with Q3 net profit attributable to parent company increasing by 38% YoY [1] - As the world's largest natural rubber planting, processing, and trading enterprise, the company is expected to fully benefit from the industry's upward trend due to reduced production in main producing areas and resilient demand growth [1][19] Financial Performance Revenue and Profit - Q3 2024 revenue reached 13 694 billion yuan, up 23 74% QoQ and 33 67% YoY [1] - Q3 2024 net profit attributable to parent company was -164 million yuan, a 38 18% YoY improvement [1] - 2024E revenue is forecasted at 46 087 billion yuan, with net profit attributable to parent company at 115 million yuan [2][22] Profitability - Q1-Q3 2024 gross margin improved to 2 88%, up 0 53 pct YoY [1] - Q3 2024 gross margin was 2 68%, up 0 38 pct QoQ and 0 93 pct YoY [1] - 2024E gross margin is expected to reach 4 9%, with net margin improving to -1 82% [1][22] Cash Flow and Asset Turnover - Operating cash flow for Q1-Q3 2024 surged 190 81% YoY to 1 55 billion yuan [1] - Inventory turnover days increased to 43 10 days, up 35 41% YoY [1] - Accounts receivable turnover days rose to 14 39 days, up 43 48% YoY [1] Business Segments Rubber Products - 2024E revenue from rubber products is forecasted at 45 578 billion yuan, with a gross margin of 4 7% [22] - Revenue growth for rubber products is expected to be 22 52% in 2024E [22] Rubber Wood - 2024E revenue from rubber wood is projected at 75 million yuan, with a gross margin of 40% [22] - Revenue growth for rubber wood is expected to be 2 74% in 2024E [22] Other Businesses - 2024E revenue from other businesses is forecasted at 434 million yuan, with a gross margin of 20% [22] - Revenue growth for other businesses is expected to be 5% in 2024E [22] Industry Outlook - Natural rubber prices are expected to maintain an upward trend due to reduced production in main producing areas and resilient demand growth [19] - The company's optimization of main business and expansion of operational scale are expected to drive future growth [19] Valuation and Forecast - 2024-2026E EPS is forecasted at 0 03/0 05/0 10 yuan [19] - 2025-2026E net profit attributable to parent company is revised upward to 200/440 million yuan [19] - 2024E PE ratio is projected at 201 2x, with PB ratio at 2 35x [2]