STL(SZ:002648)2024-04-23 02:30Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a revenue of 8.8 billion yuan in Q1 2024, a decrease of 6.9% year-on-year, while the net profit attributable to shareholders reached 1.02 billion yuan, an increase of 46.6% year-on-year [1] - The recovery in performance is primarily attributed to a reduction in ethane inventory conversion losses [1] - The company is expected to see revenue growth driven by two main factors: the expansion of oil and gas price differentials and the contribution from new projects coming online [1] Financial Performance Summary - Revenue projections for 2024, 2025, and 2026 are 51.485 billion yuan, 57.064 billion yuan, and 74.352 billion yuan respectively, with growth rates of 24.10%, 10.83%, and 30.30% [3] - Net profit projections for the same years are 6.715 billion yuan, 7.261 billion yuan, and 10.422 billion yuan, with growth rates of 40.19%, 8.14%, and 43.53% [3] - Earnings per share (EPS) are expected to be 1.99 yuan, 2.16 yuan, and 3.09 yuan for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings (PE) ratios of 9.72, 8.99, and 6.26 [3] Industry Insights - The report indicates that the C2 and C3 industry chains are experiencing differentiated price spreads due to the decline in prices of key raw materials like ethane and propane [1] - The company is investing in high-end new materials, including a project in Lianyungang with an investment of approximately 2.57 billion yuan, which includes various production facilities [1] - The company is expected to benefit from domestic substitution as new projects come online, particularly in the EAA project [1]