BAOFENG ENERGY(600989) 太平洋·2025-03-17 11:02Investment Rating - The report maintains a "Buy" rating for Baofeng Energy (600989) [1] Core Views - The Inner Mongolia project is progressing smoothly, and the decline in raw material prices is contributing to profit enhancement [1][10] - The company achieved a revenue of 32,983 million yuan in 2024, representing a year-on-year growth of 13.21%, and a net profit of 6,338 million yuan, up 12.16% year-on-year [4][5] - The Inner Mongolia project is expected to significantly increase the company's olefin production capacity to 5.2 million tons per year, making it the largest in China's coal-to-olefin industry [4][5] Summary by Sections Company Overview - Baofeng Energy operates two major production bases in Ningdong and Inner Mongolia, with the latter showing significant cost advantages in raw materials [4] - The first line of the 1 million tons/year olefin production line in Inner Mongolia was put into production in November 2024, with subsequent lines scheduled for trial production in early 2025 [4] Financial Performance - The average profit for coal-based polyethylene in 2024 was 1,967 yuan/ton, an increase of 46.7% compared to 2023 [5] - The report forecasts revenues of 48,601 million yuan, 58,129 million yuan, and 60,075 million yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 11,042 million yuan, 13,619 million yuan, and 14,546 million yuan [7] Market Conditions - The average procurement price of coal decreased by 12.96% year-on-year, leading to an increase in profit margins for the company [5] - As of March 13, 2025, the market prices for coking coal and thermal coal were 1,198 yuan/ton and 592 yuan/ton, respectively, showing significant year-on-year declines [5] Future Outlook - The company is expected to maintain growth momentum with the release of capacity from the Inner Mongolia project, with projected EPS of 1.51 yuan, 1.86 yuan, and 1.98 yuan for 2025, 2026, and 2027 respectively [5][7]