Investment Rating - The report initiates coverage on Huayi Group with an "Accumulate" rating and sets a target price of RMB 9.72, based on a 2025 PE of 18x [1][6]. Core Views - Huayi Group is a comprehensive chemical enterprise controlled by the Shanghai State-owned Assets Supervision and Administration Commission, with business segments including coal-based methanol/acetic acid, acrylic acid, tires, coatings, daily chemicals, and chemical services. The company's methanol/acetic acid/acrylic acid business is expected to benefit from price elasticity due to its scale advantages. With the ongoing state-owned enterprise reform, the continuous injection of quality assets from the controlling shareholder, such as San Aifu and Guangxi Energy Chemical, is likely to lead to a revaluation of the company's value [1][14]. Summary by Sections Company Overview - Huayi Group is a large chemical group controlled by the Shanghai State-owned Assets Supervision and Administration Commission, with a diversified business portfolio that includes coal-based methanol/acetic acid, acrylic acid, tires, coatings, daily chemicals, and chemical services. The company has a significant market presence in methanol and acetic acid production [19][22]. Production Capacity - The company has leading production capacities in methanol (1.61 million tons/year), acetic acid (1.3 million tons/year), and acrylic acid (720,000 tons/year), positioning it among the top in the industry. The expansion of MTO (Methanol to Olefins) and the impact of geopolitical conflicts on imported methanol supply may lead to a tight supply situation for methanol, while acetic acid and acrylic acid are expected to stabilize and recover in profitability [2][15]. Business Synergy and Asset Injection - The company has been enhancing its business synergy through the acquisition of quality assets from its controlling shareholder. The acquisition of a 60% stake in Shanghai Huayi San Aifu New Materials for RMB 4.09 billion has strengthened its position in the fluorochemical sector. The integration of various business segments is expected to improve operational efficiency and profitability [16][17]. Market Revaluation Potential - The company is currently trading below its book value (PB < 1), and with the ongoing state-owned enterprise reforms and the expected improvement in performance, there is potential for a revaluation of the company's market value. The continuous injection of quality assets from the controlling shareholder is anticipated to enhance the company's overall value [4][17][18]. Financial Projections - The report forecasts the company's net profit attributable to shareholders to be RMB 1.14 billion, RMB 1.38 billion, and RMB 1.56 billion for the years 2025, 2026, and 2027, respectively, representing year-on-year growth rates of 25%, 21%, and 13%. The corresponding EPS is projected to be RMB 0.54, RMB 0.65, and RMB 0.73 for the same years [6][11].

Investment Rating - The report maintains an "Outperform the Market" rating for the company [3][5][25]. Core Views - The company reported a significant increase in net profit, with a year-on-year growth of 13.71% to reach 3.386 billion yuan in 2024. The revenue for the same period was 65.556 billion yuan, reflecting a 7.01% increase year-on-year [1][6]. - The construction of the Saling Gold Mine project is progressing smoothly, with substantial growth potential anticipated. The project is expected to significantly boost the company's gold production once completed in the first half of 2026 [2][24]. - The company has a strong cash dividend policy, proposing a cash dividend of 3.88 yuan per 10 shares, totaling approximately 1.881 billion yuan, which represents 55.55% of the 2024 net profit [2][22]. Financial Performance Summary - In 2024, the company achieved a revenue of 65.556 billion yuan, with a net profit of 3.386 billion yuan and a non-recurring net profit of 3.532 billion yuan, marking increases of 7.01%, 13.71%, and 18.25% respectively [1][6]. - For Q4 2024, the company reported a revenue of 19.511 billion yuan, a quarter-on-quarter increase of 11.41%, but a net profit decrease of 17.50% due to asset impairment losses and increased management expenses [1][6]. - The first quarter of 2025 saw a revenue of 14.859 billion yuan, a year-on-year increase of 12.88%, and a net profit of 1.038 billion yuan, reflecting a year-on-year growth of 32.65% [1][6]. Production and Sales Data - In 2024, the company produced approximately 18.35 tons of mined gold, a decrease of 2.86% year-on-year, and sold about 18.09 tons, down 0.97% year-on-year. The inventory increased by 9.57% to 2.94 tons [2][15]. - The smelting gold production was around 37.95 tons, a decline of 7.14% year-on-year, with sales of 37.78 tons, down 7.91% year-on-year [2][15]. - The company has set production guidance for 2025, targeting 18.17 tons of mined gold and 35.30 tons of smelting gold [2][18]. Financial Forecasts - The company is projected to achieve revenues of 77.828 billion yuan in 2025, 79.211 billion yuan in 2026, and 80.713 billion yuan in 2027, with year-on-year growth rates of 18.7%, 1.8%, and 1.9% respectively [3][25]. - The net profit forecasts for the same years are 4.595 billion yuan, 5.035 billion yuan, and 5.511 billion yuan, with growth rates of 35.7%, 9.6%, and 9.5% respectively [3][25].