BAOFENG ENERGY(600989) -·2025-01-17 02:53Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 23.50 per share, based on a DCF valuation method [4][5]. Core Insights - The company reported a recovery in the olefin price spread in Q4 2024, while the coking segment's profitability declined due to significant price drops in coking coal and coke [2][3]. - The Inner Mongolia olefin project is progressing as planned, with the second and third production lines expected to start trial runs by the end of January and March 2025, respectively [3][10]. - The Xinjiang 4 million ton olefin project is still in the preliminary stages, awaiting government approval [3][10]. Financial Performance - The company's revenue is projected to grow from RMB 37.213 billion in 2024 to RMB 59.389 billion in 2025, reflecting a significant increase [7]. - The net profit is expected to rise from RMB 7.520 billion in 2024 to RMB 13.337 billion in 2025, indicating strong growth potential [7]. - The diluted earnings per share (EPS) is forecasted to increase from RMB 1.03 in 2024 to RMB 1.82 in 2025 [7]. Market Data - As of January 15, 2025, the company's stock price was RMB 16.68, with a market capitalization of RMB 122 billion (approximately USD 16.7 billion) [5][24]. - The stock has a 52-week price range of RMB 17.84 to RMB 13.16 [5]. Valuation Metrics - The report indicates a price-to-earnings (PE) ratio of 23x for 2024 and 13x for 2025, suggesting a favorable valuation compared to industry peers [4][7]. - The company's return on invested capital (ROIC) is projected to improve from 15.2% in 2024 to 22.5% in 2025 [7].