Hengyi Petrochemical (000703): 1H19 results in line with expectations Brunei project put into production is worth looking forward to
Performance review Maintaining outperforming industry 1H19 results in line with our expectations of the company’s 1H19 results: revenue 417.
3 ‰, at least -3.
55%; net profit attributable to mother 12.
8 ‰, +2 for ten years.
94%, corresponding profit 0.
45 yuan, in line with expectations.
The company’s gross profit margin increased by 1.
29ppt to 5.
26%, mainly due to the substantial decrease in the company’s trade income.
In terms of expense ratio, the sales expense ratio increased by 0.
07ppt to 0.
46%, the management expense rate + research and development expense rate increased by 0.
65ppt to 1.
23% (mainly due to the increase in R & D investment), 苏州桑拿网 and financial expenses increased by 0.
06ppt to 0.
The development trend is integrated and balanced development, extension and endogenous expansion of polyester filament production. The refining and chemical project 2H is expected to be put into production.
Hengyi’s existing PTA equity capacity is replaced by 622. The ownership equity capacity is 540 lengths (475 filaments), and the integration is relatively balanced.
The company merged to rapidly increase the production capacity of filament through acquisition. At present, there is only 125 tons of capacity under construction.
At the same time, the company’s Brunei refining and chemical project has been trial-produced and Q4 is officially put into production. Considering the development advantages and the advantages of overseas sales of refined oil products, we expect the refining and chemical project to significantly increase the company’s performance.
The long-term trend of PX earnings remains unchanged.
The short-term polyester industry chain companies are developing upstream. According to the forecast of China Fiber Network, the industry’s new 1220 throughput in 2019 will reach the 2620 target, which is + 87% year-on-year, and the 1310 target will gradually increase by 2020.
Taking into account the 5-10% growth rate of downstream polyester, the expansion of PX production is much higher than this. We expect the profit forecast of the PX industry to be expected, and the prosperity will decline.
The price difference of PX in 2018Q4-2019Q2 was 4939/3714/2656 yuan / ton, which further increased to 1901 yuan / ton in July, and the price gap narrowed.
PTA + polyester filament can bring continuous improvement in profits.
The change in the supply-demand pattern of the PX-PTA-polyester filament industry chain from 2019 to 2022 is conducive to the transfer of industrial chain profits to PTA + polyester filament.
The increase in supply of the polyester industry is lower than that of the PTA and PX industries, and the industry concentration trend has increased.
With the oil price bottoming out in 2019Q1, the polyester POY spreads in 2018Q4-2019Q2 were respectively 587/298/618 yuan / ton.
PTA production capacity is mainly concentrated in 2020 and beyond. The PTA spread in 2018Q4-2019Q2 is -93/656/929 yuan / ton, and we expect 2H19PTA earnings to remain high.
Earnings forecast and project progress forecast of refining and chemical projects, we lowered net profit for 2019/2020 by 18% / 3% to 32.
The current consensus is 10/2019/2020.
7 times price-earnings ratio.
We maintain our Outperform rating, but we have lowered our target price by 33 due to the increase in share capital and downward adjustment of the industry’s estimated hub.
3% to 14.
00 yuan, corresponding to 12 times the 2019 P / E ratio and 8 times the 2020 P / E ratio, which is 21 compared with the current progress.5% upside.
Risk crude oil prices fluctuated sharply, downstream demand was weak, and debt levels were high.