TKGF(601233) 国泰君安·2024-05-15 03:32Investment Rating - The report maintains a "Buy" rating for Tongkun Co., Ltd. (601233) with an updated target price of 20.30 CNY, up from the previous target of 18.60 CNY [1][3]. Core Views - The company's Q1 2024 performance met expectations, with significant profit improvement driven by a favorable supply-demand balance in the long filament industry and a recovery in the refining sector [1][2]. - The report highlights that the long filament market is expected to maintain its positive momentum, with a recovery in refining operations providing upward potential for the company's performance [1][3]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 82.64 billion CNY, a year-on-year increase of 33.3%, and a net profit attributable to shareholders of 797 million CNY, up 539.1% [1][2]. - For Q1 2024, the company reported a revenue of 21.11 billion CNY, a year-on-year increase of 32.66%, and a net profit of 580 million CNY, up 218.01% [1][3]. Market Outlook - The long filament supply-demand landscape is improving, with a slowdown in new capacity growth and an increase in industry concentration as smaller companies exit the market [1][2]. - The average prices for POY, FDY, and DTY in Q1 2024 were 6819 CNY/ton, 7357 CNY/ton, and 7951 CNY/ton, respectively, reflecting increases of 2.53%, 2.10%, and 1.71% quarter-on-quarter [1][3]. Earnings Forecast - The report adjusts the company's 2024 EPS forecast to 1.40 CNY (previously 1.55 CNY) and raises the 2025 EPS forecast to 1.85 CNY (previously 1.81 CNY), with a new 2026 EPS forecast of 2.53 CNY [1][2]. - The report assigns a PE ratio of 14.5X for 2024, leading to the revised target price of 20.30 CNY [1][3]. Investment Highlights - The recovery in the refining sector is expected to enhance investment returns, with the company holding a 20% stake in Zhejiang Petrochemical, which reported a net profit of 1.367 billion CNY in 2023 [1][2]. - The report emphasizes strong pricing power among leading companies in the long filament market, which is likely to further widen price differentials [1][3].