BAOFENG ENERGY(SH:600989) Huachuang Securities·2024-03-24 16:00Investment Rating - The report maintains a "Strong Buy" rating for Baofeng Energy (600989) [1][3] Core Views - The company achieved a revenue of 29.136 billion yuan in 2023, a year-on-year increase of 2.48%, while the net profit attributable to shareholders decreased by 10.34% to 5.651 billion yuan. The adjusted net profit increased by 11.46% to 5.949 billion yuan [1] - In Q4 2023, the company reported a revenue of 8.735 billion yuan, with year-on-year and quarter-on-quarter increases of 25.77% and 19.48%, respectively. The net profit attributable to shareholders reached 1.760 billion yuan, up 89.25% year-on-year and 7.71% quarter-on-quarter [1] - The Ningdong Phase III project has been steadily contributing to performance, with a production capacity utilization rate of 93.7% and a total of 1.585 million tons of olefin sales in 2023, an increase of 22.1% year-on-year [1] - The oil-coal price differential has improved, leading to a continuous rise in the profitability of the olefin segment. The report anticipates a recovery in olefin profitability due to the widening oil-coal price gap [1] - The Inner Mongolia project is progressing steadily, with a total olefin production capacity expected to reach 5.2 million tons upon completion. An employee stock ownership plan is proposed to align the interests of core employees [1] Financial Summary - For 2023, the total revenue is projected at 29.136 billion yuan, with a year-on-year growth rate of 2.5%. The net profit attributable to shareholders is expected to be 5.651 billion yuan, reflecting a decline of 10.3% [1] - The earnings per share (EPS) for 2023 is estimated at 0.77 yuan, with a price-to-earnings (P/E) ratio of 20 [1] - Forecasts for 2024-2026 indicate significant growth, with net profits expected to reach 9.779 billion yuan in 2024 and 14.823 billion yuan in 2025, corresponding to P/E ratios of 12 and 8, respectively [1][7]