Investment Rating - The report maintains a "Buy" rating for Hengli Petrochemical, indicating a positive outlook for the company's stock performance relative to the market index [2][6]. Core Views - The company is currently experiencing performance pressure due to the cyclical downturn, but the "anti-involution" trend in the global petrochemical industry is expected to optimize the industry landscape [5][6]. - The financial health of the company remains robust, with stable cash flow supporting dividend payments and debt servicing [5][6]. - The company is expected to benefit from the global petrochemical restructuring, with significant capacity reductions anticipated in both domestic and international markets [5][6]. Financial Summary - For H1 2025, the company reported revenue of 103.94 billion yuan, a year-on-year decrease of 7.68%, and a net profit attributable to shareholders of 3.05 billion yuan, down 24.08% year-on-year [5]. - The average selling prices of key products have declined, with refining products, PTA, and new materials seeing price drops of 5.61%, 19.41%, and 14.17% respectively [5]. - The company’s operating cash flow reached 19.48 billion yuan in H1 2025, providing a solid foundation for dividends and debt repayment [5][6]. Earnings Forecast - Projected revenues for 2025, 2026, and 2027 are 236.89 billion yuan, 244.74 billion yuan, and 251.51 billion yuan respectively, with corresponding net profits of 7.32 billion yuan, 8.47 billion yuan, and 9.38 billion yuan [6][7]. - The earnings per share (EPS) are expected to be 1.04 yuan, 1.20 yuan, and 1.33 yuan for the years 2025, 2026, and 2027 respectively [6][7]. Valuation Metrics - The report indicates a price-to-earnings (P/E) ratio of 16.44 for 2025, decreasing to 12.84 by 2027, suggesting an improving valuation as earnings grow [6][7]. - The price-to-book (P/B) ratio is projected to be 1.83 in 2025 and 1.71 in 2027, reflecting a stable valuation relative to the company's book value [6][7].