BAOFENG ENERGY(SH:600989)2024-03-21 16:00Investment Rating - The report maintains a "Recommended" rating for the company [2] Core Views - The company reported a revenue of 29.136 billion yuan for 2023, a year-on-year increase of 2.48%, while the net profit attributable to shareholders was 5.651 billion yuan, down 10.34% year-on-year. In Q4 alone, revenue reached 8.735 billion yuan, up 25.77% year-on-year and 19.48% quarter-on-quarter, with a net profit of 1.760 billion yuan, marking an 89.25% increase year-on-year and a 7.70% increase quarter-on-quarter [1] - The decline in annual profit was primarily due to the significant drop in coke prices, which fell by 22.86% year-on-year, impacting the profitability of the coking segment. However, the successful launch of the Ningdong Phase III olefin project contributed to the strong performance in Q4 [1] - The company’s sales volumes for polyethylene, polypropylene, and coke were 8.325 million tons, 7.528 million tons, and 6.976 million tons respectively, showing year-on-year growth of 18.24%, 14.10%, and 12.26% [1] Summary by Sections Financial Performance - For 2023, the company achieved a revenue of 29.136 billion yuan and a net profit of 5.651 billion yuan. The Q4 performance was particularly strong, with revenue of 8.735 billion yuan and net profit of 1.760 billion yuan [1] - The company expects revenues of 37.355 billion yuan and 60.015 billion yuan for 2024 and 2025, representing growth rates of 28.21% and 60.66% respectively. The net profit is projected to be 7.550 billion yuan and 16.397 billion yuan for the same years, with year-on-year growth of 33.62% and 117.16% [5][6] Business Outlook - The coal-to-olefins industry is experiencing an upward trend, supported by rising oil prices and a significant drop in coal prices. The company’s olefin production capacity is expected to increase significantly with the commissioning of the Ningdong Phase III project and the Inner Mongolia project, which will enhance its market position [2] - The Inner Mongolia project, which includes a capacity of 2.6 million tons/year for coal-to-olefins and associated facilities, is anticipated to start production in 2024, further boosting the company's growth potential [2]