Investment Rating - The report maintains a "Buy" rating for Lee & Man Chemical (LMC) with a target price of HKD 4.10, corresponding to price-to-earnings ratios of 6.1x, 3.7x, and 3.2x for the years 2024, 2025, and 2026 respectively [1]. Core Insights - The report forecasts a 125% year-on-year increase in shareholder net profit for the first half of 2024, amounting to approximately HKD 230 million, driven by a decrease in raw material and energy costs, as well as increased demand for chloromethane products like dichloromethane due to rising refrigerant prices [1]. - A strong recovery is anticipated in 2024, supported by improved demand and a favorable product mix. The report highlights that the elimination of some small producers during recent market consolidation is expected to lead to a rebound in prices for certain basic chemical products [2]. - New production lines for vinyl carbonate (VC) and fluorinated ethylene carbonate (FEC) at the Changshu and Zhuhai plants, respectively, are projected to generate additional revenue [2]. - LMC has adjusted the use of newly acquired land in Jiangxi to develop higher-margin high-end fluoropolymers [2]. Summary by Sections Financial Performance - The report maintains earnings per share forecasts of HKD 0.674, HKD 1.109, and HKD 1.284 for 2024, 2025, and 2026, reflecting year-on-year growth rates of 58.5%, 95.3%, and 31.1% respectively [1]. Market Dynamics - The acceleration of market consolidation is expected to enhance the company's market share [3]. - New material projects are set to commence production in 2024 and 2025, potentially boosting revenue streams [3].
理文化工：2024上半年股东净利将同比增长125%