Shengquan Group(605589) 德邦证券·2024-12-25 00:23Investment Rating - The report maintains a "Buy" rating for Shengquan Group (605589 SH) [2] Core Views - High value added projects are progressing steadily highlighting high growth potential [4] - Special electronic resin business is performing well with 300 tons PPO production line at full capacity and new 1000 tons PPO project operational since June 2024 [4] - Silicon carbon anode porous carbon material developed by the company has gained recognition from top battery manufacturers with 300 tons capacity already built and 1000 tons project expected to reach full production by end of 2024 [4] - Biomass refining integration project in Daqing has achieved over 70% capacity utilization by Q3 2024 and is expected to reach full production in Q4 2024 aiming for monthly breakeven by Q1 2025 [4] - The company conducted two share repurchases in 2024 demonstrating confidence in long term development [7] - First repurchase completed on November 27 2024 with 2 5 billion yuan repurchasing 12 84 million shares (1 52% of total shares) [7] - Second repurchase announced on December 2 2024 with planned amount between 2 5 billion yuan and 5 0 billion yuan [7] Financial Performance - Revenue and profit growth expected from 2024 to 2026 [19] - Forecasted net profit attributable to parent company: 9 12 billion yuan in 2024 (+15 6% YoY) 12 25 billion yuan in 2025 (+34 3% YoY) and 14 71 billion yuan in 2026 (+20 1% YoY) [19] - EPS forecast: 1 08 yuan in 2024 1 45 yuan in 2025 and 1 74 yuan in 2026 [19] - Main business operations remain stable with effective cost control [27] - Phenolic resin casting resin and electronic chemicals sales volumes in 2024Q1 Q3: 377 700 tons (+3 6% YoY) 130 900 tons (+13 1% YoY) and 49 600 tons (-2 0% YoY) respectively [27] - Revenue from these products: 2 742 billion yuan (+7 6% YoY) 1 131 billion yuan (-3 1% YoY) and 881 million yuan (+1 8% YoY) respectively [27] - Q3 2024 gross margin: 23 1% (+0 5pct YoY) net margin: 10 1% (+2 8pct YoY) [27] Industry and Market - The company operates in the basic chemicals plastics industry [2] - AI and optical module market boom is expected to drive demand for PCB and CCL related industries potentially increasing company profits [4]