HLGF(SH:600346) Donghai Securities·2024-04-29 07:30Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for its long-term cash flow and dividend stability [12]. Core Views - The company is a pioneer in private refining, focusing on quality improvement and efficiency to enhance returns. It has established a comprehensive industrial chain from petrochemical materials to refined oil products, leveraging its unique integration of oil, coal, and chemicals [11][19]. - The refining industry has passed its low point, and the company maintains strong profitability even under medium to high oil prices. Its ability to process inferior crude oil and unique refining techniques contribute to stable profits [11][14]. - The company has broken traditional refining processes, enhancing product cost advantages and increasing crude oil utilization rates [11][14]. - The company plans to spin off its new materials segment, which is expected to unlock significant intrinsic value and clarify its main business structure [12][19]. Summary by Sections 1. Private Refining Pioneer - The company has transitioned from fiber manufacturing to a large-scale refining platform, becoming the first private large refinery in China with a fully integrated industrial chain [19][21]. - It has a stable shareholding structure, with significant stock buybacks and employee stock ownership plans to align interests [30][32]. - The company has demonstrated strong cash flow, with over 20.47 billion yuan in cash reserves in 2023, supporting its strategic plans and capacity investments [36][34]. 2. Industry Recovery and Profitability - The refining industry is entering a positive development phase, with crude oil processing in China expected to increase significantly [46][48]. - The company has a strong ability to adapt to high oil prices, maintaining profitability through advanced refining techniques [11][14]. - The overall profitability of the refining sector is improving, with processing margins recovering from previous lows [48][50]. 3. Long-term Strategic Layout - The company has a rich product portfolio and is focusing on high-end differentiated products in the polyester sector, leveraging its refining raw material advantages [12][25]. - The planned spin-off of its new materials business is expected to enhance clarity in its business structure and broaden financing channels [12][19]. - The company is collaborating with leading firms to establish a high-end new materials innovation platform, focusing on technology transfer in high-end materials and carbon reduction technologies [27][28]. 4. Financial Forecast and Valuation - The company is projected to achieve earnings per share (EPS) of 1.19 yuan, 1.57 yuan, and 1.90 yuan for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings (PE) ratios of 12.95, 9.82, and 8.11 [12][13]. - The company has a high dividend payout ratio, with a total cash dividend of 22.371 billion yuan since its listing, representing 41.08% of cumulative net profit [36][38].