China Salt Chemical(SH:600328) HTSC·2025-03-27 08:18Investment Rating - The investment rating for the company is "Accumulate" with a target price of RMB 8.40 [7][8]. Core Views - The company reported a revenue of RMB 12.89 billion for 2024, a year-on-year decrease of 21%, and a net profit attributable to shareholders of RMB 5.2 billion, down 56% year-on-year [1][2]. - The decline in profitability is attributed to weak pricing in key products such as soda ash and PVC, alongside a 9.5% drop in soda ash sales volume to 3.66 million tons [2][3]. - The company is expected to benefit from its integrated production capabilities in the salt chemical sector, which may enhance its competitiveness during low industry demand [1][4]. Summary by Sections Financial Performance - In Q4 2024, the company achieved a revenue of RMB 3.32 billion, a decrease of 14% year-on-year, with a net loss of RMB 0.55 billion [1][2]. - The average price of soda ash fell by 26% year-on-year to RMB 1,601 per ton, impacting overall revenue [2]. - The comprehensive gross margin for 2024 decreased by 6.4 percentage points to 17.5%, with Q4 gross margin at 10.0% [2]. Production and Cost Management - The company has completed several technical improvement projects aimed at reducing production costs, which may help in maintaining profitability [3]. - The price of light and heavy soda ash as of March 25 was RMB 1,390 and RMB 1,504 per ton, respectively, indicating a slight decline from the beginning of the year [3]. Profit Forecast and Valuation - The forecasted net profit for 2025-2027 is RMB 0.89 billion, RMB 1.07 billion, and RMB 1.32 billion, respectively, with corresponding EPS of RMB 0.60, RMB 0.73, and RMB 0.90 [4][6]. - The target price of RMB 8.40 is based on a 14x PE ratio for 2025, reflecting the company's scale advantages in the salt chemical sector [4].