XINXING PIPES(000778) Minsheng Securities·2025-04-13 08:26Investment Rating - The report adjusts the investment rating to "Cautious Recommendation" [5] Core Views - The company reported a revenue of 36.194 billion yuan in 2024, a year-on-year decrease of 16.32%, and a net profit attributable to shareholders of 167 million yuan, down 87.60% year-on-year [1] - The company is a leader in the ductile iron pipe industry and is actively expanding into overseas markets, with a current production capacity of 3.2 million tons [2][3] - The demand for ductile iron pipes is expected to gradually increase due to urban pipeline renovation projects, with an estimated total investment demand of approximately 4 trillion yuan over the next five years [3] Summary by Sections Financial Performance - In 2024, the company sold 8.2164 million tons of cast pipes and steel, a decrease of 4.2% year-on-year, with specific product sales showing a decline in cast pipes and common steel but an increase in special steel [2] - The gross profit margin for 2024 was 5.40%, a decrease of 0.89 percentage points year-on-year, with the fourth quarter showing a gross profit margin of 4.84% [2] - The company experienced significant impairment losses, which negatively impacted its financial performance [2] Market Outlook - The company is well-positioned to benefit from domestic urban pipeline renovation, with a projected net profit of 396 million yuan in 2025, representing a growth rate of 136.5% [4] - The company has secured over 300,000 tons of new cast pipe contracts in 2024, with a year-end contract reserve of over 130,000 tons [3] Investment Projections - The projected net profits for 2025, 2026, and 2027 are 396 million yuan, 584 million yuan, and 784 million yuan, respectively, with corresponding price-to-earnings ratios of 33, 22, and 17 [4]