Ruitai Technology(002066) 华泰证券·2025-04-10 10:54Investment Rating - The investment rating for the company is "Accumulate" with a target price of RMB 11.20 [7][8]. Core Views - The company achieved a revenue of RMB 4.352 billion in 2024, a year-on-year decrease of 5.98%, and a net profit attributable to the parent company of RMB 57.02 million, down 21.68% year-on-year. The fourth quarter saw a revenue of RMB 1.004 billion, down 21.54% year-on-year and 9.15% quarter-on-quarter, with a net profit of RMB 16.03 million, down 34.22% year-on-year but up 355.10% quarter-on-quarter. The decline in profit was attributed to reduced capital expenditure in downstream industries, which pressured product prices. However, starting from Q4 2024, price increases in the cement industry are expected to improve, along with stricter capacity control policies, leading to a forecasted recovery in the downstream industry in 2025 [1][4]. Summary by Sections Sales and Revenue - The company maintained stable sales with revenue from refractory materials for glass kilns, cement kilns, and steel industries reaching RMB 730 million, RMB 530 million, and RMB 2.468 billion respectively in 2024, showing year-on-year changes of +14.13%, -19.29%, and -6.98%. The total product sales remained robust, with glass kiln refractory materials benefiting from previous profitability recovery in glass enterprises [1]. Profitability and Margins - The overall gross margin for 2024 was 14.75%, a decrease of 1.32 percentage points year-on-year. The gross margins for glass kiln, cement kiln, and steel refractory materials were 14.60%, 23.44%, and 11.87%, reflecting declines of 1.91, 3.81, and 0.94 percentage points respectively. The margin decline was primarily due to pressure on downstream industry profitability, which led to reduced capital expenditures and product pricing [1]. Cost Control and Financial Health - The operating expense ratio for 2024 was 12.02%, down 0.58 percentage points year-on-year. The company effectively managed costs amidst weak sales, with net profit margins of 1.31% and 0.99% for the attributable and non-attributable net profits respectively, both down year-on-year. By the end of 2024, the asset-liability ratio was 70.69%, up 0.61 percentage points year-on-year, while the interest-bearing debt ratio was 24.51%, down 0.80 percentage points [2]. Cash Flow and Dividend Policy - The operating net cash flow for 2024 was RMB 352 million, an increase of 89.6% year-on-year, with Q4 contributing RMB 328 million, up 81.9% year-on-year. The company proposed a cash dividend of RMB 1.50 per 10 shares, with a payout ratio of 60.76%, nearly doubling from 2023. The revenue target for 2025 is set at RMB 4.6 billion, indicating stable growth [3]. Profit Forecast and Valuation - Considering the expected price increases in some downstream industries and stricter capacity control policies, the forecast for 2025 net profit attributable to the parent company has been raised by 3.2% to RMB 923.3 million and by 4.7% to RMB 1.0401 billion for 2026. The target price has been adjusted to RMB 11.20, reflecting a price-to-earnings ratio of 28x for 2025, up from 25x in 2024 [4].