Shengquan Group(SH:605589) Haitong Securities·2024-04-24 07:02Investment Rating - The report maintains an "Outperform" rating for the company [11][2]. Core Views - In 2023, the company achieved operating revenue of 9.12 billion yuan, a year-on-year decrease of 4.98%, while net profit attributable to shareholders increased by 12.23% to 789 million yuan [1][22]. - The company is expected to see EPS growth from 0.93 yuan in 2023 to 1.14 yuan in 2024, with a projected reasonable valuation range of 27.36 to 29.64 yuan based on a PE ratio of 24-26 times for 2024 [2][14]. - The company is diversifying into new materials and continuously developing new products, with significant projects set to launch in 2024 [13][31]. Financial Performance Summary - The company's total revenue is projected to increase from 9.12 billion yuan in 2023 to 12.93 billion yuan in 2026, with a compound annual growth rate (CAGR) of approximately 9.8% [14][26]. - The gross profit margin is expected to improve from 23.0% in 2023 to 24.5% in 2026, indicating enhanced operational efficiency [14][26]. - The net profit is forecasted to grow from 789 million yuan in 2023 to 1.43 billion yuan in 2026, reflecting a strong growth trajectory [14][26]. Business Segment Analysis - The chemical raw materials and products segment is expected to generate revenue of 7.96 billion yuan in 2024, with a gross margin of 22.89% [4]. - The biomass chemical products segment is projected to see revenue growth from 855.76 million yuan in 2024 to 1.88 billion yuan in 2026, with a significant increase in gross margin from 5.59% to 18.00% [4]. - Other business segments are also expected to contribute positively, with revenue from other industries projected to reach 281.47 million yuan by 2026 [4]. Market Position and Competitive Landscape - The company is positioned favorably within the industry, with a focus on high-end electronic chemicals and specialty resins, which are gaining traction in various applications [13][31]. - The report highlights the company's commitment to green production and cost reduction, which enhances its competitive edge in the market [31].