SHREG(SZ:000803) Guoxin Securities·2025-09-01 07:17Investment Rating - The investment rating for the company is "Outperform the Market" [3][5][19]. Core Views - The company has significantly turned around its performance, achieving a net profit of 40.57 million yuan in H1 2025, compared to a loss in the previous period. This improvement is attributed to cost reduction efforts, increased production, and favorable market conditions for industrial-grade mixed oil [1][7]. - The company's operating cash flow has improved significantly, reaching 60.66 million yuan in H1 2025, an increase of 72.46 million yuan year-on-year [1][7]. - The gross margin has increased to 24.04% in H1 2025, up by 5.04 percentage points year-on-year, driven by higher margins in the industrial-grade mixed oil business [2][7]. - The company has submitted a private placement application to the Shenzhen Stock Exchange, aiming to raise up to 717.63 million yuan [3][19]. Summary by Sections Financial Performance - In H1 2025, the company reported revenues of 717 million yuan, a decrease of 9.3% year-on-year, primarily due to changes in the sales structure of oils. The net profit for the same period was 40.57 million yuan, marking a significant turnaround [1][7]. - The operating cash flow for H1 2025 was 60.66 million yuan, reflecting a substantial improvement compared to the previous year [1][7]. Margin and Cost Analysis - The overall gross margin for H1 2025 was 24.04%, an increase of 5.04 percentage points from the previous year. The gross margin for the industrial-grade mixed oil business rose to 25.41%, up by 6.15 percentage points [2][7]. - The company maintained stable expense ratios, with sales, management, R&D, and financial expense ratios recorded at 0.05%, 8.12%, 0.12%, and 8.80%, respectively [2][7]. Market Conditions - The price of industrial-grade mixed oil (UCO) has been on the rise, reaching an average export price of 1,054.22 USD/ton in July 2025, a 16.75% increase year-on-year [2][13]. - The domestic demand for UCO is expected to grow as the country progresses with SAF (Sustainable Aviation Fuel) pilot programs, which may further enhance the scarcity of industrial-grade mixed oil [13][15]. Future Outlook - The company has maintained its profit forecast for 2025 while adjusting upward the profit forecasts for 2026 and 2027, expecting net profits of 88 million yuan, 154 million yuan, and 200 million yuan for the respective years [3][19]. - The current stock price corresponds to a PE ratio of 37, 21, and 17 for the years 2025, 2026, and 2027, respectively [3][19].