SMIC(SH:600810) Zhongyuan Securities·2025-03-26 12:30Investment Rating - The report assigns an "Accumulate" rating to the company, indicating a potential increase of 5% to 15% relative to the CSI 300 index over the next six months [17]. Core Views - The company, Shenyang Chemical Fiber Co., Ltd., reported a revenue of 13.968 billion yuan in 2024, a year-on-year increase of 4.08%, but a significant decline in net profit by 77.57% to 33.53 million yuan [3]. - The nylon industry is currently experiencing low demand, which has negatively impacted profitability, leading to a decrease in gross margin to 11.19% [3][6]. - Despite the current challenges, the long-term outlook for nylon 66 remains positive due to its applications in automotive lightweighting and new energy sectors, which are expected to drive demand [3][6]. - The company is actively expanding its product portfolio and has initiated several projects, including a 20,000-ton differentiated nylon 66 fiber project in Thailand and a joint venture for high-end civilian yarns [6]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 13.968 billion yuan, with a slight increase of 4.08% year-on-year. However, net profit fell to 33.53 million yuan, a decrease of 77.57% [3][7]. - The gross margin for the year was reported at 11.19%, down by 1.29 percentage points from the previous year [3][7]. Market Position and Industry Outlook - The company is a leading player in the nylon industry, with a comprehensive nylon 66 supply chain. However, the industry has faced declining prices since 2022, affecting overall performance [3][6]. - The domestic production of key raw materials, such as hexamethylenediamine, is expected to enhance the competitiveness of nylon 66, potentially leading to a recovery in profitability [3][6]. Future Projections - The report forecasts earnings per share (EPS) of 0.14 yuan and 0.16 yuan for 2025 and 2026, respectively, with corresponding price-to-earnings (PE) ratios of 61.16 and 53.66 [6][7]. - Revenue projections indicate a growth trajectory, with expected revenues of 15.176 billion yuan in 2025 and 17.1 billion yuan in 2026, reflecting growth rates of 8.64% and 12.68% [7].