BAOFENG ENERGY(SH:600989) KAIYUAN SECURITIES·2024-04-26 13:30Investment Rating - The investment rating for the company is "Buy" (maintained) [2][3] Core Views - The company reported a Q1 2024 revenue of 8.227 billion yuan, a year-on-year increase of 22.2%, despite a quarter-on-quarter decrease of 5.8% [3] - The net profit attributable to shareholders for Q1 2024 was 1.421 billion yuan, up 19.9% year-on-year but down 19.3% quarter-on-quarter [3] - The company maintains its profit forecast for 2024-2026, expecting net profits of 8.556 billion, 12.362 billion, and 14.848 billion yuan, representing year-on-year growth of 51.4%, 44.5%, and 20.1% respectively [3] - The company benefits from cost advantages due to a decrease in coal prices, which offsets the decline in prices for polyethylene and polypropylene [4] Summary by Sections Financial Performance - Q1 2024 revenue was 82.27 billion yuan, with a year-on-year growth of 22.2% and a quarter-on-quarter decline of 5.8% [3] - Q1 2024 net profit attributable to shareholders was 14.21 billion yuan, a year-on-year increase of 19.9% [3] - The company expects EPS of 1.17, 1.69, and 2.02 yuan for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 14.1, 9.8, and 8.1 [3][5] Business Segments - The company has increased its polyethylene and polypropylene production capacity by 75% due to the commissioning of the Ningdong Phase III project, which added 1.5 million tons/year of methanol and 1 million tons/year of olefins [4] - In Q1 2024, polyethylene production and sales were 287,200 tons and 295,300 tons, respectively, with year-on-year increases of 59.8% [4] - The average price of coke in Q1 2024 was 1,532.57 yuan/ton, down 14.46% year-on-year, while the average procurement price of coking coal was 1,156.47 yuan/ton, down 20.8% year-on-year [4] Future Outlook - The Ningdong Phase III project is expected to enhance cost advantages, with olefin gross margins of approximately 3,550 yuan/ton [4] - The Inner Mongolia olefin project is anticipated to contribute significantly to growth, with a planned production capacity of 2.6 million tons/year [4] - The company's coal production capacity is projected to increase by 196,000 tons/year, representing a 24% increase from 2022 [4]