HUALU-HENGSHENG(600426) 开源证券·2025-03-31 13:05Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has demonstrated stable operations at its dual bases, with performance exceeding expectations at the bottom of the cycle. In 2024, the company achieved revenue of 34.226 billion yuan, a year-on-year increase of 25.55%, and a net profit attributable to shareholders of 3.903 billion yuan, up 9.14% year-on-year. The fourth quarter alone saw revenue of 9.046 billion yuan, a 14.31% increase year-on-year, and a net profit of 854 million yuan, which is a 31.61% increase year-on-year and a 3.52% increase quarter-on-quarter. Despite a generally weak market for most products and scheduled maintenance in August, the company managed to leverage the new production at its Jingzhou base and optimize operations at its Dezhou base to mitigate risks associated with the downward cycle [5][6][7]. Financial Summary - In 2024, the company’s revenue is projected to be 32.107 billion yuan in 2025, 32.359 billion yuan in 2026, and 32.621 billion yuan in 2027, with corresponding net profits of 4.275 billion yuan, 5.003 billion yuan, and 5.760 billion yuan respectively. The earnings per share (EPS) are expected to be 2.01 yuan, 2.36 yuan, and 2.71 yuan for the same years. The current stock price corresponds to price-to-earnings (P/E) ratios of 10.8, 9.3, and 8.0 for 2025, 2026, and 2027 respectively [8][10]. Product Price Trends - In Q4 2024, the average price of key products such as urea, acetic acid, and others saw declines, with average prices of 1,788 yuan/ton for urea (down 13.15% quarter-on-quarter), 2,963 yuan/ton for acetic acid (down 11.92%), and others. However, some products like DMF and octanol experienced price increases, which helped offset the declines in other product prices [6][7]. Operational Efficiency - The Dezhou base has potential for cost reduction and optimization, with its gasification furnace capacity showing room for improvement. The Jingzhou base has also seen an increase in urea production capacity, indicating that the company has not fully leveraged its platform advantages yet. Continuous cost reduction and optimization efforts at both bases are expected to support a rebound in the company's bottom-line performance [7][8].