PRCO(002225) Changjiang Securities·2025-04-23 10:30Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - The company reported a total revenue of 5.192 billion yuan for 2024, a year-on-year decrease of 5.13%, and a net profit attributable to shareholders of 135 million yuan, down 45.48% year-on-year [2][5]. - The overall market conditions are under pressure, with a slight decline in revenue and profitability due to reduced demand in the refractory materials sector, influenced by a 1.7% decrease in national crude steel production and a 9.5% drop in cement production in 2024 [6]. - The company’s refractory materials sales volume increased slightly by 0.7% to 773,000 tons in 2024, but the average selling price decreased by 416 yuan per ton to 6,718 yuan, resulting in a gross profit margin decline [6]. - Domestic sales were 3.74 billion yuan, down 6.6%, while overseas sales were 1.45 billion yuan, down 1.24%, with a notable increase in sales from the U.S. factory [6]. - The raw materials division saw significant growth, with revenue increasing by 40.3% to 817 million yuan, attributed to a higher self-supply ratio of magnesium sand [7]. - The company is expected to achieve net profits of 300 million yuan and 430 million yuan in 2025 and 2026, respectively, corresponding to price-earnings ratios of 17 and 12 times [12]. Summary by Sections Financial Performance - In 2024, the company’s total revenue was 5.192 billion yuan, with a gross profit of 986 million yuan, resulting in a gross margin of 19% [15]. - The net profit for 2024 was 135 million yuan, with earnings per share (EPS) of 0.14 yuan [15]. - The company anticipates revenue growth to 5.506 billion yuan in 2025 and 5.753 billion yuan in 2026 [15]. Market Dynamics - The refractory materials market is facing challenges due to declining demand in the steel and cement industries, impacting overall sales and profitability [6]. - The company’s overseas expansion is progressing well, with stable sales from its U.S. operations, while the Serbian factory faced challenges due to regional conflicts [6][12]. Business Segments - The steel division generated 4.43 billion yuan in revenue, down 7.77%, while the environmental materials division saw a 23.49% decline to 380 million yuan [7]. - The raw materials division's revenue growth indicates a strategic shift towards self-supply and cost management [7].