Hengli Petrochemical (600346) Review Report: Significant cost advantage in realizing the layout of the entire industry chain

Hengli Petrochemical (600346) Review Report: Significant cost advantage in realizing the layout of the entire industry chain

Event: On August 9, 2019, the company announced its 2019 interim report: The report stated that the company’s operating income in the first half of the year was 423.

3.3 billion, an increase of 60 every year.

04%; net profit attributable to mother 38.

4.4 billion, an increase of 169 per year.

71%; basic return is 0.

57 yuan.

Key points of investment: The release of the capacity of integrated refining and chemical projects, a new growth point for the company’s performance: the company’s operating income in 2019 will be 423.

3.3 billion, an increase of 60 every year.

04%; net profit attributable to mother 38.

4.4 billion, an increase of 169 per year.

71% of the performance was higher than expected due to the contribution of the final product oil and chemical products to the profit of the integrated project. The 2000 / year refining and chemical integration project of Hengli Refining & Chemical successfully put into production in March and invested 45.

24 refined oils and 227.

For 92 kinds of chemicals, if the maximum production capacity is 2000W tons, the project will be put into operation in the first half of the year.
.

In July, the revenue and profit realized by the project were 112.

56 billion, 13.

6.1 billion, with a contribution rate of 26.

59% and 35.

41%.

This part of the production capacity will continue to be released in the second half of the year, providing new growth points for the company’s performance.

Realizing the entire industry chain layout, PTA profitability is significant: 2019H1 Hengli Petrochemical PTA achieved net profit18.

2.9 billion, a significant increase in 18H1 before, of which in 2019 Q1 PTA sales were 165 苏州桑拿网 tons, Q2 sales were 127 vehicles.

The average price of H1PTA in 2019 is about 5,500 yuan / ton, up 11% over PTA-0.

The 65PX spread during Q2 was 1273 yuan / ton, which exceeded 840 yuan / ton in 2019Q1, an increase of 51.

55%. This is because the PX-naphtha price gap has narrowed significantly, and the profit center has been switched from PX to PTA. In addition, the company uses the raw materials PX produced by the project to produce PTA, which has opened up the entire industry chain., The company’s profitability is obvious.

Downstream terminal demand is slightly weak: the company’s main product PTA sales in the first half of 2019 were 292.

19 digits, which decreases by 0 every year.

1%.

The sales volume of PTAQ2 was 126.

95, down 23 from the previous month.

17%.

The reason for the decline in PTA sales is that the downturn in downstream terminal clothing, home textiles and automobiles has led to weak demand for polyester filaments, which has led to a decrease in PTA sales.

However, sales of the company’s remaining products increased slightly.

Profit forecast and investment recommendations: In view of the better-than-expected results in the 2019 interim report, we adjusted the profit forecast and estimated that the company’s net profit attributable to the parent in 19-21 will be 94.

31/114.

71/124.

18 billion, corresponding to an EPS of 1.

87/2.
27/2.
46, corresponding to PE.

34/5.

22/4.

82. Maintain the “overweight” rating.

Risk factors: Crude oil price breaks; downstream terminal demand is weak.