KINGFA(SH:600143) Great Wall Securities·2024-05-26 00:31Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% relative to the industry index in the next six months [13]. Core Views - The company faced significant pressure in 2023 due to a downturn in the chemical industry, but the modified plastics and new materials segments showed positive profitability [1][3]. - The company is expected to gradually recover its performance as the operating rates of its petrochemical segment improve and the integration of green petrochemicals with modified plastics strengthens [3][7]. Financial Summary - In 2023, the company's revenue was 47.94 billion yuan, an increase of 18.63% year-on-year, while the net profit attributable to shareholders was 317 million yuan, a decrease of 84.10% year-on-year [2][3]. - The company anticipates revenues of 50.71 billion yuan, 57.36 billion yuan, and 63.21 billion yuan for 2024, 2025, and 2026 respectively, with net profits projected at 864 million yuan, 2.05 billion yuan, and 2.59 billion yuan for the same years [2][7]. - The company's operating cash flow for 2023 was 2.41 billion yuan, down 29.88% year-on-year, while investment cash flow was -4.44 billion yuan, reflecting reduced capital expenditures [3][8]. Segment Performance - The modified plastics segment achieved a revenue of 26.97 billion yuan in 2023, up 5.14% year-on-year, with a gross margin of 23.51% [7]. - The new materials segment reported a revenue of 3.16 billion yuan, an increase of 8.77% year-on-year, with a gross margin of 17.24% [7]. - The green petrochemical segment saw a significant increase in production volume, reaching 1.50 million tons, but still faced losses due to high operational costs and lower product prices [7][9]. Future Outlook - The company is expected to benefit from the recovery of the global modified plastics market and the expansion of its production capacity, which will enhance its competitive position [7][9]. - The integration of the PP and ABS supply chains is anticipated to improve profitability in the petrochemical segment, leading to reduced losses and increased efficiency [7][9].