FSSS(600399) Minsheng Securities·2024-05-01 08:05Investment Rating - The report maintains a cautious recommendation rating for the company with a current price of 6.12 CNY [2]. Core Insights - The company's core product sales continue to grow, with significant potential in the high-temperature alloy sector [1][11]. - The company reported a revenue of 20.71 billion CNY in Q1 2024, reflecting a year-on-year growth of 3.1% and a quarter-on-quarter decrease of 9.9% [8]. - The net profit attributable to shareholders for Q1 2024 was 1.15 billion CNY, showing a year-on-year increase of 90.2% and a quarter-on-quarter increase of 43.2% [8]. Financial Forecast and Key Indicators - The total revenue is projected to grow from 8,575 million CNY in 2023 to 12,476 million CNY by 2026, with growth rates of 9.7%, 16.2%, 12.0%, and 11.8% respectively [3][13]. - The net profit attributable to shareholders is expected to increase from 362 million CNY in 2023 to 925 million CNY in 2026, with growth rates of 84.4%, 53.1%, 32.4%, and 25.9% respectively [3][13]. - The company’s PE ratio is projected to decrease from 33 in 2023 to 13 by 2026, indicating an improving valuation [13][20]. Product Performance - The company has seen a steady increase in orders for core products, with a 17.4% year-on-year increase in order volume for high-temperature alloys, ultra-high-strength steel, and special stainless steel [9][20]. - High-temperature alloys contributed significantly to the company's gross profit, accounting for 21.25% of revenue and 37.89% of gross profit in 2023 [9][20]. - The sales volume of high-temperature alloys decreased by 50% year-on-year in Q1 2024, while other product categories showed varied performance [12][19]. Strategic Developments - The company is actively adjusting its product mix and enhancing production capabilities to meet the growing demand in high-end markets, including oil services, new energy vehicles, and nuclear power [9][20]. - The company has achieved 56 product certifications and developed 216 new customers and 181 new products in the past year, indicating a strong focus on innovation and market expansion [9][20].