Xianhe(SH:603733) Huachuang Securities·2024-05-16 23:31Investment Rating - The report maintains a "Recommended" rating for the company [1][14]. Core Views - The company achieved a revenue of 8.55 billion yuan in 2023, representing a year-on-year increase of 10.5%. However, the net profit attributable to shareholders decreased by 6.5% to 660 million yuan. The adjusted net profit increased by 6.8% to 590 million yuan [1][14]. - In Q1 2024, the company reported a revenue of 2.21 billion yuan, a significant year-on-year increase of 20.2%, and a net profit of 270 million yuan, which is a remarkable increase of 120.1% year-on-year [1][14]. - The report highlights that the company's profitability is expected to improve continuously, driven by capacity release and cost reduction, with a target price set at 21.7 yuan per share [14]. Financial Summary - 2023 Financial Performance: - Total revenue: 8,553 million yuan - Year-on-year growth: 10.5% - Net profit: 664 million yuan - Year-on-year decline: -6.5% - Earnings per share: 0.94 yuan - Price-to-earnings ratio: 21 times [2][14]. - 2024 Financial Projections: - Expected total revenue: 10,208 million yuan - Expected net profit: 1,085 million yuan - Expected earnings per share: 1.54 yuan - Expected price-to-earnings ratio: 13 times [2][14]. - Long-term Projections: - Expected net profit for 2025: 1,407 million yuan - Expected net profit for 2026: 1,698 million yuan - Corresponding price-to-earnings ratios for 2025 and 2026 are projected to be 10 and 8 times, respectively [2][14]. Operational Insights - The company has a total production capacity of 1.6 million tons for specialty paper and related products, with a comprehensive production capability across the entire industry chain [14]. - The report indicates that the company has successfully expanded its market presence in Europe, Southeast Asia, and the Middle East, contributing to a steady increase in domestic sales [14].