Zhejiang Longsheng(600352) 华泰证券·2025-04-27 10:30Investment Rating - The investment rating for the company is maintained at "Accumulate" with a target price of RMB 11.88 [6][4]. Core Views - The company's Q1 net profit improved year-on-year, primarily due to the realization of revenue from its real estate business, which is entering a monetization phase [1]. - The dye and intermediate product market is showing signs of recovery, contributing positively to the company's performance [2]. - The real estate business is expected to continue generating revenue, with a significant portion of inventory already sold [3]. Summary by Sections Financial Performance - In Q1, the company achieved operating revenue of RMB 3.24 billion, with a year-on-year decline of 7.2% and a quarter-on-quarter decline of 38.7%. The net profit attributable to the parent company was RMB 400 million, exceeding expectations [1]. - The sales volume for dyes, additives, and intermediates in Q1 was 56,000 tons, 15,000 tons, and 27,000 tons respectively, with year-on-year growth of 0.8%, 0.3%, and 7.8% [2]. Cost and Margin Analysis - The company's comprehensive gross margin improved to 28.6%, up 1.5 percentage points year-on-year, due to a decrease in raw material prices [2]. - The company reported a decrease in construction projects in progress, down RMB 260 million year-on-year to RMB 570 million [2]. Real Estate Business - The real estate project "Huaxing New City" has fully topped out, with a sales rate exceeding 90%, indicating strong future revenue potential [3]. - Non-recurring gains increased by RMB 180 million year-on-year to RMB 100 million, primarily due to changes in the fair value of financial assets and liabilities [3]. Profit Forecast and Valuation - The company’s projected net profits for 2025-2027 are RMB 2.15 billion, RMB 2.36 billion, and RMB 2.47 billion respectively, with corresponding EPS of RMB 0.66, RMB 0.72, and RMB 0.76 [4]. - The target price of RMB 11.88 corresponds to an 18x PE for 2025, reflecting the company's leading position in the dye industry and orderly progress in real estate projects [4].