Hengli Petrochemical 都市夜网 (600346): Refining and Chemical Projects Put into Operation, Promote Performance and Huge Future Growth Space
Event description: On August 10, 2019, Hengli Petrochemical (600346) released its 2019 Interim Report.
In the first half of 2019, the company realized operating income 都市夜网 of 423.
33 ppm, an increase of 60 in ten years.
04%; net profit attributable to mother is 40.
21 ppm, an increase of 113 in ten years.
The preliminary trend of profit growth is that the large-scale refining and chemical projects will be put into full production and produce results, and the profit of the “polyester + PTA” industry chain business will increase significantly.
Event comment: The oil refining project is fully put into operation, new projects are about to start up, and the performance is growing rapidly.Ester “development model of the entire industry chain.
Interim report realized 325 trillion conversion and depreciation11.
3 ‰, increasing by 2 every year.
5.6 billion yuan.
Refining and chemical projects (excluding self-use PX) revenue 92.
400 million, increased income from refined oil 20.
100 million, totaling 112.
5.7 billion yuan, accounting for 26 of operating income.
Refinery segment achieved net profit13.
600 million, far exceeding market expectations.
The company’s 180 budget / year plasma, 80 additives / year re-investment, 72 forecast / year styrene will start feeding in September this year, 500 tons / year PTA, 150 tons / year ethylene conversion will start in October this year.
The scale of the company can fully enjoy the profit increase of 450 tons / year PX of refined products, and supply its own polyester industry chain. At the same time, it can also improve the overall profitability through refined oil and other chemical products.
The growth of future performance is highly certain.
PTA profit growth, the company’s performance benefited the company’s PTA in the first half of 2019 achieved 160 revenue.
48 ppm, accounting for 41 of operating income.
The average price of PTA in the first half of 2019 was 5492.
25 yuan / ton, an increase of 10 per year.
Its raw material PX average price is 7066.
10 yuan / ton, an increase of 12 in ten years.
655 coefficient ratio calculation, PX price growth rate is lower than PTA growth rate, driving the company’s performance to rise.
The company now has a PTA production capacity of 660 pounds / year, and another 500 tons / year PTA project is under construction. It is expected to start operation in October this year, when the company’s total PTA capacity will increase to 1160 tons / year.
This will help the company further strengthen its competitive advantage in scale and cost.
We expect that as a large number of refining and chemical plants are put into production, the price center of PX will gradually decline and move downward, the profit of the PX-PTA-polyester industry chain will be redistributed, and PTA will help to benefit.
At present, PTA profit is accompanied by a decline in the price of PX into the increasing channel. Until August 9, the PTA spread was 804.
19 yuan / ton, a month-on-month decrease of 50.
45%, a quarter-on-quarter increase of 12.47%.
The high profitability of PTA will drive the company’s performance growth.
The market for polyester filament yarns declined slightly, and the company’s main product for civilian polyester filaments, which has a small impact on performance, was FDY, which sold 64 in the first half of 2019.
52 digits, sales of industrial polyester filaments 7.
Civil polyester filaments have an average purity of 9994.
14 yuan / ton, temporarily decreased by 3.
78%; the average molecular weight of industrial polyester filaments is 10,766.
58 yuan / ton, down 13 before.
However, benefiting from the company’s differentiated strategy, the company’s product gross margin far exceeds the industry average, and enters the third quarter sales season, and its profit level is expected to remain high.
Starting from September 1, the United States will impose a 10% tariff on Chinese goods worth US $ 300 billion, and textile exports will be restricted to a certain extent.
However, the recent depreciation of the renminbi has increased, stimulating exports, and exceeding the industry’s average level of production capacity cost and operating quality advantages. The increase in tariffs has little effect on performance.
Investment suggestion: We believe that the company is the leader of the polyester industry chain. The smooth implementation of refining and chemical projects has significantly improved performance and is optimistic about the company’s long-term development.
It is expected that the net profit attributable to mothers in 2019/20/21 will be 91.
4 trillion, corresponding to EPS 1.
32 yuan, the corresponding PE is 9.
3 times, maintaining “strongly recommended” level.
Risk reminders: Inventory losses caused by a sharp drop in oil prices; lower than expected downstream demand; poor sales of refined oil products; and less than expected construction progress of other projects.