HLGF(SH:600346) Bank of China Securities·2025-09-08 08:22Investment Rating - The report maintains a "Buy" rating for the company, with a market price of RMB 17.20 and a sector rating of "Outperform" [1][5]. Core Views - The company demonstrates operational resilience and enhanced integration advantages, despite a year-on-year decline in revenue and net profit for the first half of 2025. The report highlights the company's improved management efficiency and financial metrics, alongside steady growth in product sales [3][8]. Summary by Sections Financial Performance - In the first half of 2025, the company achieved total revenue of RMB 1,039.44 billion, a decrease of 7.68% year-on-year, and a net profit attributable to the parent company of RMB 30.50 billion, down 24.08% year-on-year. The second quarter saw revenue of RMB 468.98 billion, a decline of 13.45%, and a net profit of RMB 9.99 billion, down 46.81% year-on-year [3][9][10]. Profitability and Cost Management - The gross profit margin for the first half of 2025 was 11.96%, an increase of 0.10 percentage points year-on-year. The profit margins for refining products, PTA, and polyester products were 17.95%, 3.49%, and 11.82%, respectively. The company has also reduced its financial expenses by 18.41% year-on-year [8][9]. Production and Sales Growth - The company reported steady growth in production and sales volumes for its refining products, PTA, and new materials, with respective increases of 9.53%, 1.64%, and 8.64% year-on-year. The integrated operational model is expected to enhance competitiveness as smaller, less efficient refineries exit the market [8][9]. Future Earnings Forecast - The forecasted net profits for 2025, 2026, and 2027 are RMB 72.73 billion, RMB 86.09 billion, and RMB 102.02 billion, respectively. The expected earnings per share for the same years are RMB 1.03, RMB 1.22, and RMB 1.45, with corresponding price-to-earnings ratios of 16.6x, 14.1x, and 11.9x [5][7]. Shareholder Returns and Strategic Initiatives - The company plans to distribute a cash dividend of RMB 5.63 billion, representing an 18.46% payout ratio. The actual controller has also announced plans to increase shareholding, which is expected to boost market confidence [8][9].