Quechen Company(SH:605183) Great Wall Securities·2025-08-29 11:11Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index within the next six months [4][18]. Core Views - The company is expected to achieve stable overall profitability in the first half of 2025, supported by the gradual ramp-up of new production capacity [1][9]. - The company’s revenue for the first half of 2025 is reported at 1.113 billion yuan, a year-on-year increase of 3.87%, while the net profit attributable to shareholders is 276 million yuan, up 5.44% year-on-year [1][2]. - The report highlights that the company is leveraging increased production volume to offset price declines due to raw material cost fluctuations, resulting in stable gross margins [2][9]. Financial Summary - Revenue projections for the company are as follows: 2025E at 2.438 billion yuan, 2026E at 2.730 billion yuan, and 2027E at 3.004 billion yuan, with year-on-year growth rates of 10.9%, 12.0%, and 10.0% respectively [1][9]. - Net profit attributable to shareholders is projected to be 578 million yuan in 2025E, 666 million yuan in 2026E, and 776 million yuan in 2027E, with corresponding growth rates of 6.9%, 15.2%, and 16.5% [1][9]. - The report indicates a stable return on equity (ROE) forecasted at 15.3% for 2025E, 15.5% for 2026E, and 15.7% for 2027E [1][9]. Production and Capacity Expansion - The company is expected to gradually release new production capacity, with significant projects nearing completion, including a 70,000-ton water glass project and a 25,000-ton high-dispersion silica project in Thailand [8][9]. - The report notes that the company has already achieved commercial supply of biomass (rice husk) high-dispersion silica, enhancing its production capacity advantage [9]. Market Position and Competitive Advantage - The new projects are anticipated to strengthen the company's competitive position in the market, particularly in the biomass silica segment, while expanding its product offerings [9]. - The company’s stock is currently valued at a price-to-earnings (P/E) ratio of 15.6 for 2024A, decreasing to 10.9 by 2027E, indicating potential for valuation improvement as earnings grow [1][9].