Xianhe(SH:603733) INDUSTRIAL SECURITIES·2024-04-29 02:02Investment Rating - The report maintains an "Add" rating for the company [3][9]. Core Views - The company reported a revenue of 8.553 billion yuan in 2023, with a year-on-year growth of 10.53%. However, the net profit attributable to shareholders decreased by 6.55% to 664 million yuan. The fourth quarter showed significant improvement in profitability, with a net profit increase of 40.14% compared to the previous quarter, attributed to product price increases and cost benefits [11]. - The company is expected to experience a significant capacity release in 2024, with production capacity reaching 1.6 million tons by the end of 2023, supported by new production bases in Guangxi and Hubei [2][3]. Financial Summary - Revenue projections for 2024-2026 are 10.692 billion yuan, 12.830 billion yuan, and 14.755 billion yuan, with corresponding year-on-year growth rates of 25.0%, 20.0%, and 15.0% respectively [16]. - The net profit attributable to shareholders is forecasted to be 931 million yuan in 2024, 1.218 billion yuan in 2025, and 1.552 billion yuan in 2026, reflecting growth rates of 40.2%, 30.9%, and 27.4% respectively [16]. - The gross margin is expected to improve from 11.6% in 2023 to 16.0% in 2024, indicating enhanced profitability [16]. - The price-to-earnings (PE) ratio is projected to decrease from 19.2 in 2023 to 8.2 in 2026, suggesting a more attractive valuation over time [16].