SMIC(SH:600810) Guotai Junan Securities·2024-04-29 03:02Investment Rating - The report maintains a "Buy" rating for Shenma Co., Ltd. (600810) with a target price of 9.84 CNY, while the current price is 7.63 CNY [14]. Core Views - The company is facing performance pressure due to the industry being at the bottom of the cycle, but it is strategically expanding into the PA66 civilian sector and enhancing its supply chain control [14][14]. - The report highlights that the company is focusing on self-sufficiency in key raw materials such as hexamethylenediamine and is investing in differentiated nylon projects in Southeast Asia to meet regional demand [14][14]. Financial Summary - The projected financial performance for Shenma Co., Ltd. includes: - Revenue for 2023 is estimated at 12,919 million CNY, with a growth of 7% expected in 2024 [8]. - Net profit for 2023 is projected at 123 million CNY, with significant growth anticipated in subsequent years [8]. - The EPS forecast for 2024 is 0.39 CNY, increasing to 0.57 CNY in 2025 [14]. Valuation Metrics - The report provides valuation metrics indicating a PE ratio of 25.23 for 2024, suggesting a favorable valuation compared to peers [14]. - The company’s financial ratios show a net profit margin of 1.0% for 2023, with expectations of improvement in the following years [14]. Industry Context - Shenma Co., Ltd. operates in the basic chemical and raw materials sector, which is currently experiencing a downturn, impacting overall performance [14]. - The company is positioned as a leader in the nylon industry, with certain barriers to entry in upstream markets, which may provide a competitive advantage [14].