STL(SZ:002648) Guotai Junan Securities·2024-03-27 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 20.40 yuan, up from the previous target of 18.70 yuan [1][2]. Core Views - The company's annual performance meets market expectations, with a 12.0% increase in revenue and a 54.7% increase in net profit attributable to shareholders in 2023 [1][2]. - The company is positioned as a leader in light hydrocarbons, navigating through cycles effectively [1]. - The report highlights the release of new production capacity as a key driver for future growth [1][2]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 41.487 billion yuan, a year-on-year increase of 54.7%, and a net profit of 4.789 billion yuan, up 55% [1][2]. - The report projects earnings per share (EPS) of 1.70 yuan for 2024 and 1.93 yuan for 2025, with a 2026 EPS forecast of 2.78 yuan [1][2]. Market Conditions - The report notes a decline in ethane raw material costs in Q4 2023, but chemical product prices remain weak due to various market pressures [1]. - The average price of ethane in Q4 2023 was 2878 yuan per ton, down 11.85% quarter-on-quarter and 24.41% year-on-year [1]. Growth Potential - The company is expanding its high-end new materials project, which is expected to enhance its long-term growth prospects [1][2]. - New products such as ethanolamine and EAA are set to be launched, further opening up growth opportunities for the company [1]. Valuation Metrics - The report provides a comparison of the company's valuation with peers, indicating a price-to-earnings (P/E) ratio of 11.74 for 2023 and a projected 9.82 for 2024 [1][2][7].