HBYH(000422) Shanxi Securities·2024-12-22 01:38Investment Rating - The report assigns an "Add-B" rating to Hubei Yihua (000422.SZ) for its growth potential following the consolidation of high-quality coal assets from Xinjiang [4]. Core Views - The acquisition of Xinjiang Yihua's coal assets enhances the company's growth prospects, with expected net profits of 934 million, 1.049 billion, and 1.28 billion yuan for 2024-2026, corresponding to P/E ratios of 15, 14, and 11 times respectively [4]. - The company has a diversified product portfolio including urea, diammonium phosphate, polyvinyl chloride, and isobutylene, with production capacities of 156, 126, 84, and 6 million tons per year, respectively [4]. - The report highlights the company's strong cost advantages in coal production, with a production cost of only 73.17 yuan per ton in the first seven months of 2024, indicating resilience even in low market conditions [2]. Financial Data Summary - The projected revenue for 2024 is 18.096 billion yuan, with a year-on-year growth of 6.2% [14]. - The expected net profit for 2024 is 934 million yuan, showing a significant recovery from a net profit of 453 million yuan in 2023, which was a decline of 79.1% [14]. - The gross margin is expected to improve from 12.7% in 2023 to 13.5% in 2024, with a net margin of 5.2% anticipated for 2024 [14]. - The company's return on equity (ROE) is projected to rise to 14.2% in 2024 from 9.3% in 2023 [14]. Market Position and Competitive Advantage - The report emphasizes that Xinjiang Yihua's coal assets are of high quality, with a total resource reserve of 2.108 billion tons and a recoverable reserve of 1.32 billion tons, which enhances the company's competitive position in the market [2][4]. - The company is positioned to benefit from the integration of its fertilizer and coal businesses, creating a synergistic effect that is expected to drive future growth [4].