HUALU-HENGSHENG(SH:600426) Soochow Securities·2024-04-24 17:00Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a Q1 2024 revenue of 8 billion yuan, a year-on-year increase of 32% and a quarter-on-quarter increase of 1%. The net profit attributable to shareholders was 1.07 billion yuan, up 36% year-on-year and 64% quarter-on-quarter, with a sales gross margin of 21.9%, an increase of 1.7 percentage points year-on-year and 4.1 percentage points quarter-on-quarter, meeting expectations [2][3] - The decline in coal prices has improved cost conditions, and the new Jingzhou base has contributed additional revenue. In Q1 2024, the company achieved revenues of 1.8 billion yuan from fertilizers, 600 million yuan from organic amines, and 1 billion yuan from acetic acid and derivatives, accounting for 25%, 9%, and 14% of total revenue, respectively [2][3] - The company’s new energy and materials segment saw revenue of 3.8 billion yuan in Q1 2024, representing 53% of total revenue, with a sales volume of 540,000 tons, an increase of 11,000 tons year-on-year [2][3] - The company maintains a low-cost competitive advantage and has improved energy efficiency, with the Jingzhou base's comprehensive energy consumption lower than approved values by 5% [2][3] Financial Summary - The company forecasts net profits attributable to shareholders of 4.5 billion yuan, 5.5 billion yuan, and 6.8 billion yuan for 2024, 2025, and 2026, respectively, corresponding to P/E ratios of 13.4, 11.0, and 8.9 times based on the closing price on April 24 [2][3] - The total revenue is projected to reach 38.63 billion yuan in 2024, with a year-on-year growth rate of 41.71% [2][3] - The report indicates that the company’s operating cash flow for 2024 is expected to be 5.33 billion yuan, with a net profit of 4.48 billion yuan [9]