HUALU-HENGSHENG(SH:600426) Guoxin Securities·2025-08-23 07:05Investment Rating - The investment rating for the company is "Outperform the Market" [6][35]. Core Views - The company's profitability improved on a quarter-on-quarter basis in Q2 2025, with revenue of 7.99 billion yuan (down 11.2% year-on-year, up 2.8% quarter-on-quarter) and a net profit attributable to shareholders of 860 million yuan (down 25.6% year-on-year, up 21.9% quarter-on-quarter) [1][10]. - The increase in profitability is primarily attributed to the growth in sales volume of main products and the recovery of price differentials for certain products [1][10]. - The company is actively promoting new projects and optimizing operational management to enhance efficiency and competitiveness [4][17]. Summary by Sections Financial Performance - In Q2 2025, the company achieved a gross margin of 19.6% (down 1.0 percentage points year-on-year, up 3.3 percentage points quarter-on-quarter) and a net margin of 12.0% (down 1.9 percentage points year-on-year, up 2.1 percentage points quarter-on-quarter) [1][10]. - The company reported a total revenue of 79.9 billion yuan for Q2 2025, with a net profit of 8.6 billion yuan [1][10]. Sales Volume and Product Performance - The sales volume of key products in Q2 2025 included 739,700 tons of new energy materials, 1,430,700 tons of fertilizers, 146,000 tons of organic amines, and 403,200 tons of acetic acid and derivatives, showing year-on-year increases of 7%, 30%, -0.2%, and 4% respectively [2][12]. - The revenue contribution from new energy materials was significant, accounting for 48% of total revenue [2][12]. Cost and Margin Analysis - The gross margins for the first half of the year were 9% for new energy materials, 31% for fertilizers, 12% for organic amines, and 33% for acetic acid and derivatives, with the fertilizer and acetic acid segments showing relatively high profitability [3][16]. - The decline in coal prices has contributed to a decrease in costs for the company, aiding in margin recovery [3][16]. Future Outlook and Investment Plans - The company plans to distribute a cash dividend of 2.50 yuan per 10 shares and has initiated a share buyback program with a budget of 200-300 million yuan [4][17]. - An investment of 3.039 billion yuan is planned for upgrading the gasification platform, which is expected to enhance production efficiency and energy utilization [4][17]. Earnings Forecast - The company has revised its net profit forecasts for 2025-2027 to 3.394 billion yuan, 4.020 billion yuan, and 4.358 billion yuan respectively, with corresponding EPS estimates of 1.60 yuan, 1.89 yuan, and 2.05 yuan [30].