BAOFENG ENERGY(600989)2024-05-06 07:33Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company's Q1 2024 performance slightly missed expectations, with revenue of 8.227 billion yuan (YoY +22.19%, QoQ -5.82%) and net profit of 1.421 billion yuan (YoY +19.89%, QoQ -19.26%) [4] - The decline in performance is primarily attributed to the downturn in the coking segment, with core products polyethylene, polypropylene, and coke sales showing mixed results [4] - The company is expected to see improved performance in the second half of the year, driven by policy effects and the gradual production ramp-up of new projects [4] Summary by Sections Financial Performance - Q1 2024 revenue was 82.27 billion yuan, with a year-on-year increase of 22.19% but a quarter-on-quarter decrease of 5.82% [4] - The core products' sales volumes for Q1 2024 were 295,300 tons for polyethylene, 267,600 tons for polypropylene, and 1,749,500 tons for coke, with respective year-on-year increases of 11.05%, 9.03%, and 17.39% [4] - Average prices for these products were 6,924 yuan/ton for polyethylene, 6,524 yuan/ton for polypropylene, and 1,533 yuan/ton for coke, showing year-on-year declines of 2.52%, 5.90%, and 14.46% respectively [4] Cost and Margin Analysis - The cost of coal, a key input, has been on a downward trend, with average procurement prices for gasification coal, coking coal, and thermal coal at 600, 1,156, and 452 yuan/ton respectively, reflecting year-on-year decreases of 19.00%, 20.80%, and 17.34% [4] - The gross margin for the company's new projects is projected to be around 3,400 yuan/ton for the second phase and 3,550 yuan/ton for the third phase of the olefin project [4] Future Growth Prospects - The company is set to gradually commence production of its 3 million tons olefin project in Inner Mongolia by October 2024, which is expected to significantly enhance its production capacity [4] - The company aims to achieve a net profit of 8.826 billion yuan, 15.043 billion yuan, and 17.977 billion yuan for the years 2024, 2025, and 2026 respectively, with corresponding PE ratios of 14, 8, and 7 [5][6]