BAOFENG ENERGY(SH:600989) Changjiang Securities·2025-10-26 09:20Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - The company reported a significant increase in performance for the third quarter of 2025, with total revenue reaching 35.545 billion yuan, a year-on-year increase of 46.43%. The net profit attributable to shareholders was 8.950 billion yuan, up 97.27% year-on-year, while the net profit excluding non-recurring items was 8.972 billion yuan, an increase of 82.85% year-on-year [2][6]. - In the third quarter of 2025, the company achieved revenue of 12.725 billion yuan, a year-on-year increase of 72.49% and a quarter-on-quarter increase of 5.61%. The net profit attributable to shareholders was 3.232 billion yuan, up 162.34% year-on-year but down 1.48% quarter-on-quarter. The net profit excluding non-recurring items was 3.392 billion yuan, a year-on-year increase of 144.03% and a quarter-on-quarter increase of 13.74% [2][6]. Financial Performance - The company’s financial performance shows a strong upward trend, with projected net profits for 2025, 2026, and 2027 expected to be 12.65 billion yuan, 14.47 billion yuan, and 15.03 billion yuan respectively. The corresponding price-to-earnings ratios are 10.0X, 8.8X, and 8.4X based on the closing price on October 23, 2025 [12]. - The company’s production capacity for polyethylene and polypropylene has increased significantly, with production volumes of 676,800 tons and 655,900 tons respectively in the third quarter of 2025, reflecting a 6.3% increase quarter-on-quarter [12]. Project Development - New projects are progressing steadily, including the Ningdong Phase IV olefin project, which commenced construction in April 2025 and is on track for completion by the end of 2026. The Xinjiang olefin project and Inner Mongolia Phase II olefin project are also actively advancing [12]. - The company’s coal-to-olefin project in Inner Mongolia, with a capacity of 2.6 million tons per year, is the largest of its kind globally and is expected to significantly enhance the company’s production capabilities [12].