AHB(SH:688639) HTSC·2025-04-23 01:20Investment Rating - The investment rating for the company is maintained at "Buy" [7] Core Views - The company reported a revenue of 2.18 billion RMB for 2024, a year-on-year increase of 12%, but the net profit attributable to shareholders decreased by 58% to 190 million RMB [1] - The decline in profitability is attributed to the drop in valine prices and increased expenses, with the fourth quarter of 2024 showing a significant drop in net profit [1] - The first quarter of 2025 saw a revenue increase of 37% year-on-year, driven by a rebound in valine prices [1][2] - The company is expected to benefit from the gradual market expansion of new products such as tryptophan, PDO, and succinic acid, which may open up growth opportunities [1][3] Summary by Sections Financial Performance - In 2024, the average market price of valine was 14.4 RMB/kg, down 37% year-on-year, primarily due to competition and increased industry capacity [2] - The overall revenue from amino acid products increased by 3% to 1.51 billion RMB, but the gross margin decreased by 13.3 percentage points to 30% [2] - The comprehensive gross margin for the company fell by 15.6 percentage points to 24.9% in 2024 [2] Product Pricing and Market Conditions - As of April 22, 2024, the prices for valine, tryptophan, and arginine were 13.5, 45.5, and 28 RMB/kg respectively, indicating a decline due to industry competition [3] - The first quarter of 2025 showed a slight recovery in valine prices, but the overall market conditions for small amino acids remain challenging [2][3] Future Growth Potential - New projects, including the production of succinic acid and PDO, are expected to gradually release capacity and contribute to future growth [3] - The company has adjusted its profit forecasts for 2025-2026, expecting net profits of 290 million and 380 million RMB respectively, reflecting a decrease from previous estimates [4] - The target price for the company is set at 30.42 RMB, based on a price-to-earnings ratio of 26 times for 2025 [4][8]