STL(SZ:002648) Southwest Securities·2024-03-27 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 24.36 CNY over the next six months [1][7][13]. Core Insights - The company reported a revenue of 41.49 billion CNY for 2023, representing a year-on-year increase of 12.0%. The net profit attributable to shareholders reached 4.79 billion CNY, up 54.7% year-on-year, with a basic EPS of 1.42 CNY, reflecting a 56.0% increase [2][7]. - New production capacities and integrated operations have significantly improved performance. The company successfully launched a 600,000 tons/year styrene project and a 400,000 tons/year polystyrene project, among others [2][3]. - The company is expanding its C3 product line, including the acquisition of Jiangsu Jiahong New Materials Co., which adds a new epoxy propane production line, enhancing its competitive edge [2][3]. Summary by Sections Financial Performance - The company achieved a revenue of 41.49 billion CNY in 2023, with a net profit of 4.79 billion CNY, and a basic EPS of 1.42 CNY [2][8]. - Forecasted net profits for 2024-2026 are 6.83 billion CNY (+42.6%), 8.98 billion CNY (+31.5%), and 11.12 billion CNY (+23.9%) respectively, with corresponding EPS of 2.03 CNY, 2.67 CNY, and 3.30 CNY [7][12]. Market Position and Strategy - The company is focusing on enhancing its C2 and C3 product lines, with significant investments in new materials and hydrogen utilization projects [2][3]. - The company plans to invest 25.7 billion CNY in a new high-end materials park, which will further extend its product offerings in the downstream market [2][3]. Valuation Metrics - The report suggests a dynamic PE of 8x for 2024, 6x for 2025, and 5x for 2026, with a target valuation of 12x for 2024 based on expected growth from new material capacities [7][13].