SLSVC(SH:600123) Minsheng Securities·2025-10-31 09:10Investment Rating - The report maintains a "Cautious Recommendation" rating for the company [4] Core Views - The company reported a significant decline in revenue and net profit for the first three quarters of 2025, with revenue at 5.886 billion yuan, down 30.1% year-on-year, and a net profit of 10.154 million yuan, down 98.5% year-on-year [1] - The coal business showed signs of improvement in profitability due to rising prices and decreasing costs, with a gross margin of 31.4% in Q3 2025 [2] - The urea production and sales decreased significantly in Q3 2025, but the gross margin improved to 15.5% [3] Summary by Sections Financial Performance - For Q3 2025, the company achieved revenue of 1.835 billion yuan, a decrease of 37.6% year-on-year, and a net loss of 46.964 million yuan [1] - The coal production for Q3 2025 was 3.84 million tons, with a sales volume of 2.99 million tons, and the average selling price per ton was 485.4 yuan [2] - Urea production was 113,000 tons with a sales volume of 139,000 tons, and the average selling price was 1,734.7 yuan per ton [3] Profitability Forecast - The company expects net profits to improve in the coming years, with forecasts of 234 million yuan in 2025, 542 million yuan in 2026, and 812 million yuan in 2027 [4] - The earnings per share (EPS) are projected to be 0.16 yuan in 2025, 0.37 yuan in 2026, and 0.55 yuan in 2027, with corresponding price-to-earnings (PE) ratios of 43, 18, and 12 respectively [4] Market Conditions - The report indicates that coal prices are entering an upward trend, and Q4 is expected to be a peak season, which may lead to improved profitability for the company [4]