BAOFENG ENERGY(SH:600989) EBSCN·2024-03-27 16:00Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company achieved a revenue of 29.14 billion yuan in 2023, a year-on-year increase of 2.5%, while the net profit attributable to shareholders decreased by 10.3% to 5.65 billion yuan. In Q4 2023, revenue reached 8.74 billion yuan, up 25.8% year-on-year and 19.5% quarter-on-quarter, with a net profit of 1.76 billion yuan, marking a significant year-on-year increase of 89.3% [4][5] - The company is enhancing its high-end coal-based new materials industry chain and increasing its investment in product technology innovation. The Ningdong Phase III project has been completed and is expected to significantly boost production capacity [6] - The major shareholder plans to increase its stake in the company, reflecting confidence in its future development. An employee stock ownership plan has also been introduced to align employee interests with company performance [6] Summary by Sections Financial Performance - In 2023, the company reported a total revenue of 29.14 billion yuan, with a net profit of 5.65 billion yuan. The Q4 performance showed a revenue of 8.74 billion yuan and a net profit of 1.76 billion yuan, indicating strong growth [4][5] - The company’s earnings per share (EPS) for 2024-2026 are projected to be 1.20, 1.89, and 2.04 yuan respectively, with net profits expected to reach 8.83 billion, 13.88 billion, and 14.97 billion yuan [7][8] Production Capacity and Projects - The Ningdong Phase III project has been launched, adding 1.5 million tons of methanol and 1 million tons of olefins capacity, which is expected to increase polyethylene and polypropylene production capacity by 75% [6] - The Inner Mongolia project is progressing well, with construction over halfway completed in 2023 [6] Shareholder Returns - The company has consistently paid cash dividends since its listing, distributing approximately 10.6 billion yuan in cash dividends over the past five years, which is about 40% of the net profit attributable to shareholders [6] - For 2023, the company plans to distribute a total cash dividend of 2.047 billion yuan, with a payout ratio of 36.24% [6] Valuation and Future Outlook - The company is positioned as a leader in the coal-to-olefins sector, focusing on industrial synergy and cost reduction, with significant growth potential ahead [7] - The report projects a positive outlook for the company’s profitability due to the anticipated recovery in demand and improvement in price differentials for polyolefins [7]