Shengquan Group(SH:605589) HTSC·2025-10-30 06:41Investment Rating - The investment rating for the company is maintained at "Buy" [1][4] Core Views - The company reported Q3 revenue of 2.722 billion RMB, a year-on-year increase of 7.75% but a quarter-on-quarter decrease of 5.89%. The net profit attributable to shareholders was 259 million RMB, up 3.73% year-on-year but down 12.10% quarter-on-quarter. For the first three quarters of 2025, the company achieved a revenue of 8.072 billion RMB, a year-on-year increase of 12.87%, and a net profit of 760 million RMB, up 30.81% year-on-year [1][2] - The demand for advanced electronic materials and battery materials has significantly increased, with sales volume reaching 60,000 tons, a year-on-year growth of 19%, and sales revenue of 1.2 billion RMB, up 32% year-on-year. The synthetic resin industry maintained resilience, achieving sales volume of 590,000 tons, a 14% increase year-on-year, and sales revenue of 4.1 billion RMB, up 5% year-on-year [2] - The company has initiated several key projects, including the expansion of various resin projects, which are expected to be completed and put into production by Q3 2026. The biomass product projects are also progressing, with significant expansions planned [3] Summary by Sections Financial Performance - For Q3, the company achieved a revenue of 2.722 billion RMB, with a net profit of 259 million RMB. For the first three quarters of 2025, total revenue reached 8.072 billion RMB, and net profit was 760 million RMB [1][2] - The overall gross margin increased by 1.7 percentage points to 24.9%, while the expense ratio decreased by 0.3 percentage points to 12.9% [2] Project Development - The company has started several resin projects aimed at meeting domestic supply needs, with expected completion by Q3 2026. The biomass product projects are also on track, with expansions planned for the end of 2025 and mid-2026 [3] Profit Forecast and Valuation - The net profit forecast for 2025 has been adjusted down to 1.09 billion RMB, a 9% decrease from the previous estimate. The projected net profits for 2026 and 2027 are 1.39 billion RMB and 1.61 billion RMB, respectively, with year-on-year growth rates of 28% and 16% [4] - The target price for the company is set at 39.36 RMB, based on a 24x PE valuation for 2026 [4]