TKGF(SH:601233) Changjiang Securities·2025-05-07 11:43Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company reported a slight revenue decline of 8.0% year-on-year and a 23.1% quarter-on-quarter decrease, with total revenue reaching 19.42 billion yuan in Q1 2025. However, net profit attributable to shareholders increased by 5.4% year-on-year and surged by 213.0% quarter-on-quarter, amounting to 610 million yuan. The net profit excluding non-recurring items was 600 million yuan, reflecting an 11.7% year-on-year increase and a significant 446.9% quarter-on-quarter rise [2][5]. Summary by Sections Financial Performance - In Q1 2025, the company achieved a gross margin of 7.7%, up by 1.0 percentage points year-on-year and 4.6 percentage points quarter-on-quarter. The net margin was 3.2%, an increase of 0.4 percentage points year-on-year and 2.4 percentage points quarter-on-quarter. The company also reported investment income from joint ventures and associates of 250 million yuan, which remained stable year-on-year and increased by 70 million yuan quarter-on-quarter [10]. Industry Outlook - The polyester filament industry is showing signs of recovery, with supply and demand expected to improve. The industry has entered a phase of reduced capacity expansion, with a projected 2.3% year-on-year decline in capacity for 2024. The concentration ratio of the top five companies in the industry has risen to 65%. It is anticipated that the new annual capacity in 2025 will be around 2 million tons, leading to a tightening supply-demand balance and an upward trend in industry prosperity [10]. Market Position - The company is the largest polyester filament producer in China, with an annual production capacity of 13.5 million tons. It has maintained the top sales position in the polyester filament industry for 24 consecutive years, giving it significant market influence. The company is expected to benefit from the rising prosperity of the polyester filament market, with projected net profits for 2025, 2026, and 2027 estimated at 2.81 billion, 3.41 billion, and 4.21 billion yuan, respectively [10].