Xingfa Chem(SH:600141) Guoxin Securities·2025-04-01 03:21Investment Rating - The investment rating for the company is "Outperform the Market" [4][6][27] Core Views - The company's performance is supported by the stable operation of the phosphate chemical industry chain, with revenue growth and recovery in gross/net profit margins. In 2024, the company achieved operating revenue of 28.396 billion yuan, a year-on-year increase of 1.04%, and a net profit attributable to shareholders of 1.601 billion yuan, a year-on-year increase of 16.13% [10][11] - Phosphate rock prices are expected to remain high due to declining extractable grades and increasing demand from downstream sectors. The company holds significant phosphate resource advantages, with approximately 395 million tons of phosphate reserves and a designed production capacity of 5.85 million tons per year [2][19] - The profitability of the organic silicon and glyphosate sectors is anticipated to recover. Glyphosate prices have stabilized, and the organic silicon industry is showing strong price support, with DMC prices rising significantly [3][22][23] Summary by Sections Financial Performance - In 2024, the company reported a gross margin of 19.52%, up 3.30 percentage points year-on-year, and a net margin of 5.70%, up 0.72 percentage points year-on-year. The mining and selection business saw a revenue increase of 65.28% to 3.557 billion yuan, with a gross margin of 74.28% [10][11] - The special chemicals business generated 5.278 billion yuan in revenue, a 4.97% increase, while the pesticide business achieved 5.204 billion yuan, a 21.50% increase. However, the organic silicon business faced challenges with a revenue of 2.647 billion yuan and a negative gross margin of -3.77% [11][18] Business Outlook - The company is expected to benefit from ongoing projects, including a 1 million tons/year optical mining project and various organic silicon and pesticide projects, which will enhance its competitive position in the market [26] - The company’s phosphoric acid production and other projects are progressing steadily, which will contribute to future profit growth [26] Profit Forecast - The company’s net profit forecasts for 2025, 2026, and 2027 are 1.800 billion yuan, 1.942 billion yuan, and 2.051 billion yuan, respectively, with year-on-year growth rates of 12.4%, 7.9%, and 5.6% [4][27]