XINXIANG CHEMICAL(SZ:000949)2024-04-04 16:00Investment Rating - The report assigns a rating of "Outperform" to the company, indicating that its total return over the next 12-18 months is expected to exceed the return of its relevant broad market benchmark [24]. Core Insights - The company is expected to benefit from recent price increases in viscose filament, as it is a leading player in the industry [16]. - In 2023, the company achieved total operating income of RMB 7.379 billion, a year-on-year increase of 1.43%, with a total profit of RMB 15.67 million, marking a significant improvement from the previous year [17][18]. - The company's two main products, spandex fiber and biomass cellulose filament, have significant scale advantages, with spandex fiber revenue accounting for 60.69% and biomass cellulose filament revenue accounting for 35.39% of total operating income in 2023 [43]. Summary by Sections Company Overview - The company primarily engages in the production and sale of chemical fibers, including biomass cellulose filament and spandex fiber, with a diverse range of specifications to meet customer needs [17][18]. Financial Performance - The company reported operating revenues of RMB 87.40 billion in 2021, RMB 72.74 billion in 2022, and RMB 73.79 billion in 2023, with corresponding growth rates of 95.25%, -16.77%, and 1.43% respectively [4]. - The gross profit margin for 2023 was 7.73%, compared to 4.42% in 2022, indicating an improvement in profitability [4]. Production Capacity and Projects - The company has been gradually increasing its production capacity, with the spandex fiber capacity reaching 180,000 tons in 2023 due to the commissioning of new production lines [18]. - The biomass cellulose filament production capacity reached 90,000 tons by the end of 2023, following the completion of several projects [18]. Market Trends - The demand for artificial silk is rapidly increasing, driven by trends in national style and fashion, leading to a tightening supply and subsequent price increases [36].