wanhua(600309) 东方证券·2025-01-19 05:29Investment Rating - The report maintains a Buy rating for Wanhua Chemical with a target price of 100.47 yuan, based on a 17x PE multiple for 2025, reflecting a 15% premium due to its superior long-term ROE and historical growth [4][7] Core Views - Wanhua Chemical is expected to reach a significant inflection point in 2025, driven by improved profitability in its polyurethane business and enhanced dividend potential [2][9] - The polyurethane business, particularly MDI, is anticipated to benefit from a favorable supply-demand dynamic, with limited new global capacity additions and steady demand growth [9][12] - The company's dividend capacity is expected to improve as capital expenditures on heavy-asset projects decrease, shifting focus from upstream bulk chemicals to downstream new materials and fine chemicals [9][13] Financial Projections - Revenue is projected to grow from 175.36 billion yuan in 2023 to 229.48 billion yuan in 2026, with a CAGR of 6.1% [6] - Net profit attributable to shareholders is forecasted to increase from 16.82 billion yuan in 2023 to 21.45 billion yuan in 2026, with a CAGR of 15.6% [6] - EPS is adjusted to 4.76 yuan, 5.91 yuan, and 6.83 yuan for 2024-2026, down from previous estimates of 5.82 yuan, 6.89 yuan, and 8.00 yuan [4] Polyurethane Business Outlook - MDI industry is expected to see improved profitability due to limited new capacity and rising demand, with Wanhua's MDI business entering a prolonged upcycle [9][12] - Global MDI demand is projected to reach 917-991 million tons by 2027, with supply growth potentially lagging behind demand, creating a tight market [20][21] - Wanhua's cost advantage and strategic capacity expansions position it well to capitalize on the industry's recovery [33][36] Dividend Potential - Wanhua's dividend capacity is expected to improve significantly from 2025, driven by reduced capital expenditures and higher EBITDA [51][53] - The company's dividend payout ratio could reach 40% or higher, translating to over 8 billion yuan in dividends, making it attractive to income-focused investors [53][55] Industry and Competitive Landscape - Wanhua's integrated production base, comparable in scale to BASF's, supports its competitive advantage in cost and efficiency [46][48] - The company's shift towards downstream new materials and fine chemicals is expected to reduce cyclicality and improve investment returns [47][49] - Competitors like Covestro and Huntsman face financial challenges, potentially limiting their ability to expand capacity and compete effectively [25][29]