Hengyi Petrochemical (000703) 2018 Annual Report Performance Comment: Downstream Filament M & A Expansion Upstream Upstream Refining & Chemical Co., Ltd. Will Become Production
The company’s 2018 performance was in line with expectations. In the fourth quarter of 2018, oil prices fell sharply, and factors such as inventory losses led to single-quarter growth.
The current polyester filament industry boom is rapidly picking up, and processing profits at various stages have rebounded significantly.
In addition, oil prices have returned to the upward path, and Air Force inventory preparations are expected to reverse.
The company’s downstream filament continued to extend its mergers and acquisitions to consolidate its leading position. The upstream Brunei Refining and Chemical Project is expected to start production in 2019 and will enter the era of industrial chain integration.
The company’s 2018 performance was in line with expectations.
The company achieved operating income of 8.49 million yuan in 2018, + 29% for the whole year, and net profit attributable to the mother 19.
US $ 600 million, + 16% a year; of which, in the 18th quarter, operating income was US $ 21 billion, + 13% a year, + 15% MoM, and net profit attributable to the mother -2
400 million US dollars, similar to other companies in the same industry, as of the fourth quarter of 2018, large inventory losses and other reasons led to single quarter expectations.
In addition, the company announced that it plans to pay a dividend of RMB 3 per 10 shares in 2018, and the dividend will account for 43% of the net profit attributed to the mother.
In the fourth quarter of 2018, oil prices fell sharply, and factors such as inventory losses led to a single quarter outage.
In the fourth quarter of 2018, international oil prices fell sharply. Brent and WTI oil 武汉夜网论坛 prices were -35% and -38% quarter-on-quarter, respectively. After that, the prices of major products in the polyester industry chain fell.-24%, -26%, similar to other companies in the same industry, the company’s 2018Q4 inventory loss was serious, of which the company accrued 1.
2 trillion inventory depreciation reserve.
The prosperity of the filament industry is picking up rapidly in 2019. In the first quarter, the average processing profit of PTA / filament POY / FDY / DTY was 169/2/437/433 yuan / ton.
In addition, in the first quarter of 2019, the price of oil returned to the upward path, and the price of chemicals in the industrial chain increased. It is expected that in the first quarter of 2019, inventory gains will be generated, and the price of weapons storage goods will be prepared to reverse.
Downstream filaments transitioned and acquired new production 杭州夜网 capacity, which continued to consolidate some of the industry leaders.
The company recently acquired Jiaxing Yipeng, Taicang Yifeng, Shuangtu New Materials 100% equity, increased polyester fiber production capacity by 145 inserts, the current industry chain holdings 1350 to replace PTA, 630 polyester polyester (415 length filament + 150 inch bottle(+ 65-inch staple fiber), Nylon industry chain holding caprolactam 30 mm.
In addition, the company also acquired Zhejiang Hengyi Logistics and Ningbo Hengyi Logistics to build its own logistics network and reduce product transportation costs.
The company rapidly expanded downstream capacity through outsourcing mergers and acquisitions, and its market share continued to increase.
The upstream Brunei Refining and Chemical Project is expected to be put into production this year.
The company’s first phase 800 early refining and petrochemical project in Brunei terminated 30 days of accumulated investment.
One billion US dollars, the overall progress of the project is 93%. It is expected that the commissioning of the materials can be achieved this year. At that time, the company will realize the “PX-PTA-polyester” industry chain leap.
The company’s Brunei refining and petrochemical project enjoys preferential property rights and free of corporate income for 11 years. At the same time, its refined oil products can be sold directly on the international market. The domestic market for refined oil products is highly competitive. Direct sales on the international market are an important advantage of the company’s large refining and chemical projects.
Risk factors: the risk of the gradual evolution of international oil prices, the risk of intensified trade disputes between the United States and China, and the risk that the company’s construction projects are not progressing as expected.
Investment recommendation: As the company’s large-scale refining and chemical project is lower than expected, the company’s 2019-2020 performance forecast is lowered to 34.
6 trillion (previous forecast was 53.
500 million), new profit forecast for 2021 57.
50,000 yuan, corresponding to 1 for 2019-2021 EPS.
02 yuan, the current sustainable corresponding PE is 13/8/8 times.
Following the 10x PE estimate in 2020, the company is given a target price of 20.
0 yuan, maintain “Buy” rating.