SD HEAD(SZ:002810) Shanghai Securities·2024-04-19 14:00Investment Rating - The report gives a "Buy" rating for the company, indicating an expectation that the stock will outperform the benchmark index by more than 20% over the next six months [88]. Core Viewpoints - The company is a leading player in the cellulose ether market and is actively expanding into overseas markets and emerging application areas. With the recovery of overseas demand and the introduction of new production capacity, the company's performance is expected to enter an upward trajectory [97]. - The forecast for the company's revenue from 2023 to 2025 is projected to be 1.769 billion, 2.425 billion, and 2.625 billion yuan, with year-on-year growth rates of 2.65%, 37.10%, and 8.25% respectively. The net profit attributable to the parent company is expected to be 282 million, 392 million, and 452 million yuan, with year-on-year growth rates of -20.28%, 39.00%, and 15.25% respectively [70][98]. Summary by Sections Company Overview - The company focuses on cellulose ether and its downstream applications, with subsidiaries involved in various related products. Recent acquisitions and expansions have strengthened its market position [13][36]. Market Analysis - The cellulose ether market is expanding, with increasing demand for high-end products and domestic alternatives. The company is well-positioned to benefit from this trend [14][21]. - The global market for plant-based capsules is projected to grow, driven by increasing health awareness and the aging population, which will enhance the demand for the company's products [33][65]. Financial Performance - The company achieved a revenue of 428 million yuan in Q3 2023, reflecting a quarter-on-quarter growth of 14.05%, indicating a recovery in demand [11]. - The forecasted earnings per share (EPS) for 2023, 2024, and 2025 are 0.83, 1.15, and 1.32 yuan respectively, with corresponding price-to-earnings (PE) ratios of 16.72x, 12.03x, and 10.44x [70][98]. Product and Capacity Expansion - The company has a cellulose ether production capacity of 34,000 tons per year, with ongoing projects expected to increase this capacity significantly [36][66]. - The plant-based capsule production capacity is also expanding, with a target of 15 billion capsules per year, enhancing the company's competitive edge in this segment [66][91].