HLGF(SH:600346) Soochow Securities·2024-03-11 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1][2] Core Views - The company plans to distribute a cash dividend amounting to over 50% of its net profit attributable to shareholders for the year 2023, reflecting a commitment to shareholder returns [2] - The capital expenditure intensity is expected to decline, allowing for a sustained high dividend payout ratio [2] - The recovery of downstream product demand is anticipated to restore overall refining profitability, with specific sectors like PX maintaining high profitability while olefins face challenges [2] Financial Forecasts and Valuation - Total revenue is projected to grow from 222.37 billion RMB in 2022 to 284.49 billion RMB in 2025, with a compound annual growth rate (CAGR) of approximately 8.30% [1][6] - Net profit attributable to the parent company is expected to rebound significantly from 2.32 billion RMB in 2022 to 13.24 billion RMB in 2025, reflecting a growth rate of 48.59% in 2025 [1][6] - The earnings per share (EPS) is forecasted to increase from 0.33 RMB in 2022 to 1.88 RMB in 2025, indicating a strong recovery trajectory [1][6] - The price-to-earnings (P/E) ratio is projected to decrease from 39.59 in 2022 to 6.93 in 2025, suggesting improved valuation attractiveness [1][6] Dividend Policy - The company has increased its dividend payout ratio to over 50% for 2023, up from 40% in previous years, demonstrating a focus on enhancing shareholder returns [2] - The dividend yield is estimated to be around 3.8% based on the projected net profit of 6.9 billion RMB for 2023 [2] Capital Expenditure and Asset Management - The company has entered a new capital expenditure cycle since 2021, with significant investments in various projects, including functional films and PTA production [2] - As these projects reach completion, capital expenditure intensity is expected to decrease, contributing to a potential decline in the debt-to-asset ratio [2] Market Conditions - The PX sector is experiencing high profitability due to increased downstream polyester operating rates and demand for oil adjustments, with a year-on-year price spread increase of 21% [2] - Conversely, the olefins market is under pressure due to a downturn in the real estate cycle and new capacity releases, leading to a decline in profitability [2]