TKGF(SH:601233) Huaxin Securities·2024-05-06 13:00Investment Rating - The report maintains a "Buy" rating for Tongkun Co., Ltd. (601233.SH) [2][5] Core Views - The company has turned losses into profits in Q1 2024, driven by the recovery in the polyester filament market and increased production capacity [2][3] - The textile industry in China has shown resilience, with a significant recovery in retail sales of textile and apparel products [2][4] - The company has achieved a historical high market share in the polyester filament industry, with a global market share of 18% and a domestic market share of 28% [4] Summary by Sections Financial Performance - In 2023, the company reported revenue of 82.64 billion yuan, a year-on-year increase of 33.3%, and a net profit of 797 million yuan, up 539.1% [2] - For Q4 2023, revenue was 20.898 billion yuan, a year-on-year increase of 41.16%, but a quarter-on-quarter decrease of 15.88% [2] - In Q1 2024, the company achieved revenue of 21.111 billion yuan, a year-on-year increase of 32.66%, and a net profit of 580 million yuan, marking a return to profitability [2][3] Market Dynamics - The polyester filament industry is experiencing a recovery, with a reported 12.9% year-on-year increase in retail sales of clothing, shoes, and textiles in 2023 [2][4] - The company’s production capacity for polyester filament has increased, with sales volumes for POY, FDY, and DTY rising by 37.4%, 36.9%, and 12.7% respectively in Q1 2024 [3][4] Market Position - As of the end of 2023, the company’s PTA production capacity exceeded 10 million tons, with a polyester filament capacity of 13.5 million tons, maintaining its position as the world's largest producer [4] - The company has consistently ranked first in the polyester filament industry in China for 23 consecutive years, indicating strong market influence [4] Profitability Forecast - The company is projected to achieve revenues of 88.3 billion yuan, 94.3 billion yuan, and 102.1 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 1.25 yuan, 1.72 yuan, and 2.15 yuan [5] - The current stock price corresponds to a PE ratio of 11, 8, and 6.4 for the years 2024, 2025, and 2026 respectively, indicating potential for growth [5]