Core Viewpoint - The company, Xin Feng Ming, reported a year-on-year increase in revenue and net profit for Q3 2025, indicating a recovery in demand for polyester filament and an optimistic industry outlook [1] Group 1: Financial Performance - In Q3 2025, the company achieved a revenue of 51.542 billion yuan, a year-on-year increase of 4.8%, and a net profit attributable to shareholders of 0.869 billion yuan, a year-on-year increase of 16.6% [1] - For Q3 2025, the company reported a revenue of 18.051 billion yuan, a year-on-year increase of 0.7%, but a quarter-on-quarter decrease of 4.7%, with a net profit of 0.161 billion yuan, a year-on-year increase of 14.0% [1] Group 2: Industry Demand and Capacity - The apparent consumption of polyester filament in the first three quarters of 2025 reached 26.72 million tons, a year-on-year increase of 6.6%, indicating a continuous recovery in demand [1] - The operating rate of downstream weaving machines has improved since early August 2025, reaching 69.0% by October 30, 2025, driven by the traditional peak season [1] - The average operating rate for polyester filament in Q3 2025 was 89.3%, a year-on-year increase of 5.0 percentage points, but a quarter-on-quarter decrease of 1.5 percentage points [2] Group 3: Inventory and Profitability - Polyester filament inventory remained at a reasonable level, with the average inventory days for POY in Q3 2025 being 18.9 days, a decrease of 0.8 days year-on-year [2] - The profitability of polyester filament remained stable in Q3 2025, with the price spreads for POY, DTY, FDY-PTA, and MEG being 1,077 yuan, 2,153 yuan, 1,314 yuan per ton, respectively, showing a year-on-year narrowing of 7.5%, 13.61%, and 19.28% [3] Group 4: Future Outlook - The company is expected to see performance improvement as terminal demand stabilizes and increases, with projected net profits of 1.2 billion yuan, 1.3 billion yuan, and 1.6 billion yuan for 2025-2027, corresponding to EPS of 0.77 yuan, 0.88 yuan, and 1.07 yuan, and PE ratios of 21.1X, 18.6X, and 15.2X [4]

Investment Rating - The report maintains a "Buy" rating for the company, expecting the stock price to outperform the industry index by more than 15% in the next six months [5][21]. Core Views - The company is expected to maintain stable performance in 2024, with a revenue increase of 9.1% year-on-year to 67.09 billion yuan and a slight net profit increase of 1.3% to 1.1 billion yuan [1][2]. - The report highlights that the petrochemical sector has negatively impacted short-term performance, but overall profitability remains stable [2]. - The company is positioned to benefit from a recovery in the long filament industry, supported by its integrated PTA-polyester supply chain [12][13]. Financial Performance Summary - **Revenue and Profitability**: The company’s revenue for 2024 is projected at 67.09 billion yuan, with a year-on-year growth rate of 9.1%. The net profit is expected to be 1.1 billion yuan, reflecting a modest growth of 1.3% [1][2]. - **Earnings Per Share (EPS)**: The latest diluted EPS is projected to be 0.72 yuan for 2024, with expectations of growth to 0.96 yuan in 2025 and 1.49 yuan by 2027 [1][13]. - **Return on Equity (ROE)**: The ROE is expected to slightly decrease to 6.4% in 2024 but is projected to improve to 10.3% by 2027 [1][13]. - **Cash Flow**: The net cash flow from operating activities is expected to increase significantly by 85.57% year-on-year to 6.79 billion yuan in 2024, driven by higher cash receipts from sales [3]. Industry Overview - The polyester filament industry is currently facing price pressures, but the long-term supply-demand dynamics are expected to improve, leading to a gradual recovery in industry conditions [10][11]. - The report notes that the overall polyester industry in China is experiencing good growth, with exports expected to rise by 15% in 2024 [11]. - The company has a strong market position, with a domestic market share exceeding 12% in polyester filament production, and is the largest producer of polyester short fibers in China [12].