XfmGroup(SH:603225) Guohai Securities·2024-04-26 10:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights a significant recovery in the polyester filament price spread, leading to a substantial increase in the company's net profit for Q1 2024 compared to both year-on-year and quarter-on-quarter [4][9] - The company achieved a revenue of 14.452 billion yuan in Q1 2024, representing a year-on-year increase of 15.5% but a quarter-on-quarter decrease of 16.3%. The net profit attributable to the parent company was 275 million yuan, up 45.3% year-on-year and 38.0% quarter-on-quarter [3][4] Financial Performance Summary - In Q1 2024, the company reported: - Revenue: 14.452 billion yuan, up 15.5% year-on-year, down 16.3% quarter-on-quarter - Net profit: 275 million yuan, up 45.3% year-on-year, up 38.0% quarter-on-quarter - Gross profit margin: 5.9%, up 0.5 percentage points year-on-year, up 1.38 percentage points quarter-on-quarter - Net profit margin: 1.9%, up 0.4 percentage points year-on-year, up 0.7 percentage points quarter-on-quarter - Operating cash flow: -1.712 billion yuan [3][4][9] Market Position and Outlook - The company is the largest polyester filament manufacturer in China, with a market share exceeding 12%. It plans to increase its production capacity by 400,000 tons in 2024 and 650,000 tons in 2025 [6] - The report anticipates that the company's revenue will reach 67.001 billion yuan in 2024, 70.854 billion yuan in 2025, and 77.478 billion yuan in 2026, with net profits projected at 1.845 billion yuan, 2.378 billion yuan, and 2.700 billion yuan respectively [9][19] Investment Thesis - The company is expected to benefit from a favorable industry environment, with a projected increase in polyester filament demand and a reduction in competitive pressures due to slower capacity expansion in the industry [6][9] - The report maintains a "Buy" rating based on the company's growth potential and favorable valuation metrics, with projected P/E ratios of 11, 9, and 8 for the years 2024, 2025, and 2026 respectively [9][19]