HYPC(SZ:000703) Great Wall Securities·2025-09-03 11:00Investment Rating - The report maintains a "Buy" rating for Hengyi Petrochemical, expecting the stock price to outperform the industry index by more than 15% in the next six months [5][13][23]. Core Viewpoints - The company's performance in the first half of 2025 is under pressure, with a significant decline in revenue and net profit due to market conditions affecting multiple business segments [2][3]. - The Brunei refining project is progressing steadily, which is expected to fill the supply gap in the Southeast Asian refined oil market [11][12]. - The polyester product differentiation is accelerating, with the company enhancing its competitive advantage through the development of high-value-added differentiated products [10][12]. Financial Summary - Revenue for 2023 is projected at 136.15 billion, decreasing to 125.46 billion in 2024, with a slight recovery to 133.72 billion in 2025 [1][14]. - The net profit attributable to shareholders is expected to drop significantly to 234 million in 2024, before rebounding to 504 million in 2025 [1][14]. - The company's return on equity (ROE) is forecasted to improve from -0.2% in 2024 to 1.5% in 2025 [1][14]. Operational Insights - The company's cash flow from operating activities showed a significant decline, with a net cash flow of -181 million in the first half of 2025, primarily due to increased procurement payments [3][14]. - The company is focusing on vertical integration in its operations, aiming to enhance its product matrix and optimize structural layout [12][13]. Market and Industry Analysis - The "anti-involution" policy is expected to improve the supply-demand dynamics in the filament industry, leading to the exit of outdated production capacity [4][9]. - The polyester downstream demand remains stable, with a notable slowdown in capacity growth, which is beneficial for the company's competitive positioning [9][10]. - The company is leveraging its technological advantages and scale to maintain its market position amid industry consolidation [10][12].