HUALU-HENGSHENG(SH:600426) Huachuang Securities·2025-08-29 11:33Investment Rating - The report maintains a "Strong Buy" rating for the company, indicating an expectation to outperform the benchmark index by over 20% in the next six months [1][16]. Core Insights - The company's Q2 performance shows a recovery compared to previous quarters, driven by technological upgrades and new material projects that support long-term growth [1]. - The report highlights a significant investment of 3.039 billion yuan in upgrading the gasification platform, which is expected to generate annual revenue of 3.665 billion yuan upon completion [6]. - The company has successfully managed to stabilize its operations despite market challenges, with Q2 revenue from various segments showing positive trends [6]. Financial Performance Summary - Total revenue for 2024 is projected at 34.226 billion yuan, with a year-on-year growth rate of 25.6%. For 2025, revenue is expected to reach 35.765 billion yuan, reflecting a slower growth rate of 4.5% [2]. - The net profit attributable to the parent company is forecasted to be 3.903 billion yuan in 2024, decreasing to 3.510 billion yuan in 2025, which represents a decline of 10.1% [2]. - Earnings per share (EPS) are estimated to be 1.84 yuan in 2024, dropping to 1.65 yuan in 2025, with a projected recovery to 1.96 yuan in 2026 [2]. Operational Highlights - In H1 2025, the company reported total revenue of 15.764 billion yuan, a decrease of 7.14% year-on-year, with a net profit of 1.569 billion yuan, down 29.47% [6]. - The company plans to distribute a cash dividend of 2.50 yuan per share, totaling 530 million yuan, which accounts for 33.76% of the net profit for the period [6]. - The report emphasizes the company's focus on cost optimization and the acceleration of transformation into new material products, which is expected to enhance its competitive edge [6].