HLGF(SH:600346) SINOLINK SECURITIES·2024-04-09 16:00Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next 6-12 months with expected price appreciation of over 15% [32][34]. Core Insights - The company reported a significant recovery in performance for 2023, with total revenue reaching RMB 234.87 billion, a year-on-year increase of 5.62%, and a net profit attributable to shareholders of RMB 6.91 billion, up 197.83% year-on-year [2][6]. - The refining segment showed strong profitability recovery, supported by high product price differentials, particularly in diesel and gasoline, which are expected to remain at elevated levels due to robust domestic demand and reduced overseas refining capacity [11][18]. - The chemical segment is anticipated to recover alongside improving demand, with notable increases in price differentials for key products like polyethylene and PTA [20][18]. - The company emphasizes shareholder returns, proposing a cash dividend payout ratio exceeding 50% of net profit for 2023, reflecting a commitment to enhancing shareholder value [26][2]. Financial Performance Summary - In 2023, the company achieved a revenue of RMB 234.87 billion, with a net profit of RMB 6.91 billion, marking a substantial recovery from previous years [2][6]. - The average price differentials for refined products in 2023 were RMB 912 for diesel, RMB 1,129 for gasoline, and RMB 2,597 for aviation kerosene, indicating a favorable market environment [11][18]. - The company’s earnings per share (EPS) for 2024 is projected to be RMB 1.14, with corresponding price-to-earnings (P/E) ratios of 12.7X for 2024, 10.1X for 2025, and 8.4X for 2026 [2][30]. Future Outlook - The company is expected to benefit from the recovery in economic conditions and the anticipated increase in product price differentials, with projected net profits of RMB 8 billion in 2024, RMB 10 billion in 2025, and RMB 12 billion in 2026 [2][30]. - New material production capacities are set to come online, which will further enhance the company's growth prospects in high-value downstream products [24][20].