Befar(SH:601678)2024-06-04 10:00Investment Rating - The report assigns an "OUTPERFORM" rating to the company with a target price of RMB 7.47 [1][21]. Core Views - The company has made significant progress in R&D, particularly in hydrofluoric acid and hydrogen chloride projects, with multiple pilot projects and patent applications filed [1][20]. - The construction of various projects is progressing well, which is expected to enhance performance in the coming years [1][19]. - The company reported a revenue of RMB 7.31 billion in 2023, a decrease of 17.84% year-on-year, and a net profit attributable to shareholders of RMB 0.38 billion, down 67.49% year-on-year [12][18]. Financial Summary - Revenue and Profitability: - 2023 revenue was RMB 73.06 billion, down 17.84% YoY; net profit was RMB 3.83 billion, down 67.49% YoY [12][18]. - Q1 2024 revenue was RMB 19.48 billion, up 10.98% YoY, with a net profit of RMB 0.29 billion, down 58.92% YoY [12][18]. - Revenue Forecast: - Expected revenues for 2024, 2025, and 2026 are RMB 113.44 billion, RMB 121.54 billion, and RMB 135.94 billion respectively [16]. - Profitability Metrics: - The gross margin is projected to improve from 17.6% in 2023 to 24.7% by 2026 [16]. - Net profit margins are expected to increase from 5.2% in 2023 to 6.9% in 2026 [16]. Project Development - The company has successfully initiated several projects, including propane and butane utilization, with significant milestones achieved in 2023 [19]. - Key projects such as the ultra-high purity electronic-grade hydrofluoric acid and deep purification of electronic-grade hydrogen chloride have received provincial funding support [1][20].