STL(SZ:002648) Orient Securities·2024-03-26 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 22.36 yuan, adjusted from the previous target of 22.20 yuan [2][4]. Core Insights - The company achieved a revenue of 41.487 billion yuan in 2023, representing a year-on-year growth of 12%. The net profit attributable to shareholders was 4.789 billion yuan, up 54.71% year-on-year, with a planned dividend of 1.347 billion yuan. This growth is primarily attributed to the increased production and sales from the Lianyungang petrochemical project, showcasing its cost competitiveness despite a general downturn in the petrochemical industry [1]. - The company is expected to continue benefiting from declining raw material prices, with ethane and propane costs decreasing by 22% and 12% respectively in 2023. This has led to an increase in gross and net profit margins by 3.3 and 3.1 percentage points. Projections for 2024 indicate a further 20% drop in ethane prices, suggesting potential for expanded profit margins [1]. - New projects are progressing well, including an integrated chemical production base in Lianyungang and Jiaxing. The Jiaxing project is set to begin trial production in Q2 2024, while the Lianyungang high-end new materials project is also advancing. These initiatives aim to diversify the product range and enhance the company's presence in high-end product sectors [1]. Financial Summary - The company reported a revenue of 41,487 million yuan in 2023, with a year-on-year growth of 12.0%. The net profit attributable to shareholders was 4,789 million yuan, reflecting a significant increase of 54.7% compared to the previous year. The earnings per share (EPS) for 2023 was 1.42 yuan, with projections for 2024, 2025, and 2026 set at 1.72 yuan, 2.01 yuan, and 2.13 yuan respectively [3][5]. - The gross margin improved to 19.8% in 2023 from 16.5% in 2022, while the net margin increased to 11.5% from 8.4% in the same period. The return on equity (ROE) also saw an increase to 20.1% in 2023 from 14.9% in 2022 [3][5].