Huafon Spandex(002064) Great Wall Securities·2025-04-08 11:12Investment Rating - The report maintains a "Buy" rating for the company, expecting the stock price to outperform the industry index by over 15% in the next six months [5]. Core Views - The company's performance in 2024 is expected to be under pressure due to declining prices of its main products, spandex and adipic acid, influenced by market supply-demand imbalances. However, the industry is anticipated to gradually recover as concentration increases and downstream differentiated applications expand [2][4]. - The company is actively expanding its production capacity, including a 150,000-ton spandex expansion project and a 1.1 million-ton integrated natural gas base, which are expected to contribute positively to future revenues [4][10]. Financial Summary - Revenue and Profit Forecasts: The company is projected to achieve revenues of 26,931 million yuan in 2024, a 2.4% increase year-on-year, with a net profit of 2,220 million yuan, reflecting a 10.4% decline [1][11]. - Cash Flow: The net cash flow from operating activities is expected to rise to 3,025 million yuan in 2024, a 22.53% increase year-on-year, while cash flow from investing activities is projected to decline significantly due to increased structural deposit purchases [3]. - Key Financial Ratios: The report highlights a decrease in gross profit margin to 13.83% in 2024, down 1.52 percentage points from the previous year, alongside an increase in financial and sales expenses [2][12]. Industry Insights - The spandex market is facing short-term challenges due to price declines, with the average price of domestic spandex 40D expected to drop by approximately 17.11% in 2024 [4]. - The adipic acid market is characterized by intense competition and price fluctuations, with a projected increase in domestic production capacity by 9.63% in 2024, leading to a supply-demand imbalance [9]. - The report notes that the polyurethane raw material market has significant growth potential, particularly in the footwear sector, where the application ratio is currently below that of developed countries [10].