Huate Gas(SH:688268) Great Wall Securities·2024-06-04 12:01Investment Rating - The report upgrades the investment rating of the company to "Buy" [5][19]. Core Views - The company has successfully entered the supply chains of large-scale integrated circuits, new display panels, photovoltaic energy, and hydrogen energy, establishing a strong first-mover advantage. As the consumer electronics and semiconductor industries gradually recover, the company's product structure is diversifying, and its business scale is expanding, leading to expected performance recovery [5][11]. - The company's revenue and net profit for 2023 decreased year-on-year due to several factors, including the normalization of rare gas raw material prices, weak demand in consumer electronics, and increased interest expenses from convertible bond issuance. However, the gross margin improved to 30.59% in 2023, and the net margin remained stable [2][9]. - The company is expected to achieve net profits of 221 million, 303 million, and 364 million yuan for 2024, 2025, and 2026, respectively, with corresponding EPS of 1.83, 2.51, and 3.02 yuan [5][9]. Financial Summary - In 2023, the company reported a revenue of 1,500 million yuan, a decrease of 16.8% year-on-year, and a net profit of 171 million yuan, down 17.2% year-on-year. The gross margin for 2023 was 30.59%, an increase of 3.71 percentage points year-on-year [2][9]. - The company's operating income is projected to recover in the coming years, with expected revenues of 1,929 million yuan in 2024, 2,228 million yuan in 2025, and 2,673 million yuan in 2026, reflecting growth rates of 28.6%, 15.5%, and 20.0%, respectively [1][5]. - The report indicates that the company's return on equity (ROE) is expected to improve from 9.2% in 2023 to 14.0% in 2026 [1][26].