BAOFENG ENERGY(SH:600989) Bank of China Securities·2025-09-22 01:34Investment Rating - The report maintains a "Buy" rating for the company, with a previous rating also being "Buy" [1] Core Views - The company has shown significant growth in revenue and net profit, driven by the successful production ramp-up of its Inner Mongolia project, which is expected to contribute positively to future earnings [5][10] - The report highlights a decrease in polyethylene product prices, leading to a downward adjustment in revenue and profit forecasts for 2025-2026, while still maintaining a positive outlook for 2027 [7] Financial Performance Summary - For the first half of 2025, the company achieved total revenue of RMB 22.82 billion, a year-on-year increase of 35.05%, and a net profit of RMB 5.72 billion, up 73.02% [11] - In Q2 2025, revenue reached RMB 12.05 billion, reflecting a 38.97% year-on-year growth, with net profit increasing by 74.17% to RMB 3.28 billion [12] - The company’s EPS for 2025 is projected at RMB 1.63, with corresponding P/E ratios of 10.3, 9.1, and 8.1 for 2025, 2026, and 2027 respectively [7][9] Production and Capacity - The Inner Mongolia project has a capacity of 2.6 million tons/year for coal-to-olefins and has fully ramped up production, contributing significantly to the company’s total output [10] - The company produced 1.16 million tons of polyethylene, accounting for 48.39% of its total polyethylene production in the first half of 2025 [10] Profitability Metrics - The overall gross margin for the first half of 2025 was 36.74%, an increase of 3.14 percentage points year-on-year, with polyethylene products showing a gross margin of 39.14% [10]