BAOFENG ENERGY(600989) 长江证券·2024-11-29 03:25Investment Rating - The investment rating for the company is "Buy" and is maintained [9][11]. Core Viewpoints - The darkest hour has passed, and the polyolefin industry landscape is stabilizing and improving, with coal-to-olefins routes offering higher economic benefits compared to oil-based routes [6][7]. - Xinjiang has excellent coal resources, and since the 14th Five-Year Plan, national policies have accelerated the matching of various industrial factors, supporting the rapid advancement of the company's projects in Xinjiang and opening up growth space [6][7]. Summary by Relevant Sections Why Coal-to-Olefins is Promising - The demand growth for polyolefins has slowed, aligning with GDP growth levels, while supply growth has significantly declined, leading to a potential stabilization of the industry landscape [6][51]. - The cost advantage of coal-based routes is significant, as coal-to-olefins production relies on stable and reliable raw material sources, contrasting with the high import dependency of oil and gas [6][7][67]. Why Xinjiang Coal-to-Olefins is Attractive - Xinjiang's coal resources are advantageous, with low mining costs and supportive government policies accelerating the development of new coal chemical projects [7][67]. - The region's infrastructure improvements, including water and rail resources, are enhancing the competitive edge of coal-to-olefins projects [7][67]. Why the Company is Attractive - The company is a leading player in coal-to-olefins with high growth potential and low costs, expecting to increase its production capacity significantly with new projects [8][9]. - The company has a low investment intensity, which helps maintain lower depreciation and amortization costs, while continuous process innovations reduce energy and water consumption [8][9]. Investment Recommendations - The company is expected to achieve net profits of 6.24 billion yuan, 13.62 billion yuan, and 15.54 billion yuan from 2024 to 2026, with corresponding PE ratios of 19.4X, 8.9X, and 7.8X based on the closing price on November 27, 2024 [9].