BAOFENG ENERGY(SH:600989) Guoxin Securities·2025-03-12 15:12Investment Rating - The investment rating for the company is "Outperform the Market" [4][20][22] Core Views - The company's revenue for 2024 is projected to be 32.98 billion yuan, representing a year-on-year increase of 13%, with a net profit of 6.34 billion yuan, also up 12% year-on-year. In Q4 2024, revenue is expected to be 8.71 billion yuan, slightly down 0.3% year-on-year but up 18% quarter-on-quarter, with a net profit of 1.80 billion yuan, up 2% year-on-year and 46% quarter-on-quarter [1][9][20] - The main products, polyethylene and polypropylene, saw increased production and sales due to new olefin capacity. The average selling prices for polyethylene and polypropylene were 7,106 yuan/ton and 6,663 yuan/ton, respectively, with polyethylene prices increasing and polypropylene prices slightly decreasing [2][14] - The decline in coal prices has reduced the cost of coal-to-olefin production, enhancing the company's cost advantage. The average procurement prices for key raw materials decreased by 9% to 13% year-on-year [3][18] Summary by Sections Financial Performance - In Q4 2024, the company achieved a gross margin of 31.4% and a net margin of 20.7%, with a period expense ratio of 5.9%, which has decreased year-on-year and quarter-on-quarter. The revenue growth is attributed to the release of new olefin capacity and increased sales, alongside optimized expense ratios [1][9][20] Product Performance - The production and sales volumes for polyethylene were 315,800 tons and 309,700 tons, while for polypropylene, they were 341,500 tons and 340,600 tons, respectively. The increase in production and sales is primarily due to the contribution from new olefin capacity [2][14] - The EVA and LDPE production and sales volumes significantly increased, with EVA production and sales reaching 52,900 tons and 57,200 tons, respectively, reflecting a quarter-on-quarter increase of 81% and 120% [2][14] Cost Structure - The average procurement prices for gasification raw coal, coking coal, and thermal coal were 563 yuan/ton, 1,073 yuan/ton, and 414 yuan/ton, respectively, showing a year-on-year decrease. The price of coal continues to decline, which is expected to maintain a favorable cost structure for the company [3][18] Investment Outlook - The company is expected to maintain its profit growth trajectory, with net profit forecasts for 2025, 2026, and 2027 at 12.21 billion yuan, 12.41 billion yuan, and 13.27 billion yuan, respectively. The corresponding EPS is projected to be 1.66 yuan, 1.69 yuan, and 1.81 yuan, with a current PE ratio of 10.5, 10.3, and 9.6 for the respective years [4][20][24]