中盐化工（600328）：2025年第一季度利润同比下滑；期待纯碱需求反弹

1Q25Profit Yoy Dipped; AwaitingSoda Ash Demand Rebound Rating (Maintain):OVERWEIGHTTarget price (RMB):7.56 Huatai Research Quarterly Results Review 14 May 2025│China (Mainland) Chemical Raw Materials AnalystZHUANG TingzhouSAC No. S0570519040002SFC No. BQZ933zhuangtingzhou@htsc.com+(86) 10 5679 3939 CNSIG Chemical’s1Q25 revenue/attributable NP/recurring NPwereRMB2,770/17/6mn (+3/-73/-74%yoy,-17/+131/+103%qoq).Given its integratedsalt-chemicalproduction capabilities, the company is likely to remain competitive in a subduedindustry climate, in our view. Maintain OVERWEIGHT. AnalystZHANG XiongSAC No. S0570523100003SFC No. BVN325zhangxiong@htsc.com+(86) 10 6321 1166 Soda ash volume/priceconstrained qoq in 1Q25Draggedbyslowercommissioningofnewsoda-ash capacitiesandsoftdownstream glass demand, the company’s soda-ash sales volume and priceswereconstrained qoq: for 1Q25, sales volumewas950k tonnes (+71%yoy,-17%qoq), revenuewasRMB1.21bn (+9.8%yoy,-18%qoq), whereastheASP dippedby36%yoyand1.4%qoqtoRMB1,274/tonne.Salesvolumesofcausticsoda/PVC/paste resin were90kt/94kt/54kt (-18/-5/-19%qoq), with revenues ofRMB210/410/350mn (-29/-22/-6%qoq), and ASPs at RMB2,326/4,329/6,485pertonne (-4/-11/-9% yoy,-14/-4/-0.7%qoq).Paste resinsawanotable yoy rise insales volume, whilethebusiness climatesfor most other offerings slid yoy and qoqfor the quarter. The overall 1Q25 GPMwas9.5% (-5pp yoy,-0.5pp qoq), whereastheexpense ratio was 6.8% (-2pp yoy, +0.7pp qoq). Key data Soda-ash market awaits recovery amid cost reduction effortsAccording to oilchem.net, as of 25 April, reference prices for light/heavy soda ash were RMB1,353/1,450per tonne (-1.6/-3.3%vs early April), remaining weak amidindustrysupply/demandimbalances.Price-costspreadsforammonia-soda/combined-sodaprocesseswereRMB565/320pertonne(upRMB13/72 vs early April), supported by lower costs for thermal coal,syntheticammonia andraw salt. At end-1Q25, projects under construction were worthRMB640mn, up by RMB50mn vs early2025. The company completed multipletechnical-upgrade projects in 2024, including dynamic equilibrium environmentalinitiatives in Qinghai and salt lake tailings utilization projects, based on its 2024annual report, which are likely in our view to enhance cost efficiency. In January,the company announced a joint venture with PetroChina (holding a 49% stake) tosecure mining rights for newly discovered natural soda deposits in China. Source:Wind Earnings forecasts and valuationGiventepid market conditionsforsoda ash/PVC, we lower our ASP estimates forthecompany’skeyofferings,trimmingour2025/2026/2027attributableNPforecastsby31/27/23%from RMB886/1,069/1,320mn to RMB612/780/1,011mn,withEPSofRMB0.42/0.53/0.69.ConsideringCNSIGChemical’sscaleadvantages in the salt-chemical market, we value the stock at 18x 2025E PE, vsits peers’average of 15x on Wind consensus. Our target price is RMB7.56(previous: RMB8.40, based on 14x 2025E PE, vsitspeers’thenaverage of 12x).Maintain OVERWEIGHT. Risks:weaker downstream demand than we expect; a deteriorating competitivelandscape due to rising new capacity in soda ash. Source:Wind,Huatai Research Source:Wind,Huatai Research Full financials Disclaimers Analyst CertificationI/We, ZHUANG Tingzhou, ZHANG Xiong, hereby certify that the views expressed in this report accurately reflect the personal views of the analyst(s) about the subject securities or issuers; and no part of the compensation of the analyst(s) was, is, or willbe, directly or indirectly, related to the inclusion of specific recommendations or views in this report. General Disclaimers and DisclosuresThis research report has been prepared by Huatai Financial Holdings (Hong Kong) Limited (hereinafter referred to as“HFHL”).The information herein is strictly confidential to the recipient. This report is intended for HFHL, its clients and associatedcompanies. Any other person shall not be deemed a client of the Company merely from his or her receipt of this report. This report is based on information deemed reliable and publicly available by HFHL, but HFHL and its associated company(ies)(collectively, hereinafter“Huatai”)makes no guarantee as to the accuracy or completeness of such information. The opinions, assessments and projections contained herein only reflect the views and judgments at the issuance date. Huataimay issue research reports that contain inconsistent views, assessments and projections with those set out herein at differenttimes. The prices, values and investment returns of the securities or investment instruments referred to herein may fluctuate.Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.Huatai makes no warrants that the information in this report be kept up to date. The information contained in this report maybemodified without notice by Huatai, and investors shall pay attention to such updates or modifications when necessary. HFHL is not a U.S. Financi