In 2021, H1 acetic acid remained high, and the company's performance reached a record high, maintaining the "buy" rating. According to the company announcement, the company achieved an operating income of 3.918 billion yuan in the first half of 2021, an increase of 161.01% over the same period last year, and a net profit of 1.504 billion yuan, an increase of 17594.51% over the same period last year. In the single quarter of Q2 in 2021, the company achieved operating income of 2.239 billion yuan, an increase of 237.58% over the same period last year, and a net profit of 959 million yuan, an increase of 2521.40% over the same period last year. The acetic acid industry continues to be booming in 2021, and the company has fully benefited from being a leader in the industry. The company plans to acquire the new material company, the growth space opens. We maintain the company's profit forecast for 2021-2023 and expect the net profit from 2021 to 2023 to be 27.50,23.23 and 2.27 billion yuan, with EPS 2.35,1.99,1.94 yuan respectively. The current stock price corresponds to 9.7,11.5,11.7 times of PE, maintaining the "buy" rating.

Under the resonance of supply and demand of H1 in 2021, the price of acetic acid remains high, and the price of acetic acid is expected to remain high in 2021. The start-up of overseas supply is unstable, and the continued prosperity of overseas real estate has stimulated the export volume of Q2 acetic acid to increase significantly. According to Baichuan Yingfu, from April to June 2021, the export volume of acetic acid reached 13.58,9.34 and 87000 tons respectively, which reached + 208.77%, + 626.01% and 570.62% respectively over the same period last year. In 2021, the production capacity of PTA and EVA increased year on year, the demand for acetic acid increased compared with the same period last year, and domestic acetic acid plants stopped frequently. Under the mismatch between supply and demand, the price of acetic acid remains high. According to Zhuochuang Information, in 2021, the average annual price of Q2 acetic acid reached 7604 yuan / ton (+ 228.12% compared with the same period last year), and the company fully benefited. According to Baichuan Yingfu, there are still a large number of maintenance plans in the industry in the future, and the supply side is favorable and the support is obvious. From 2021 to 2022, there is less new production capacity in the industry, and downstream PTA, EVA and other production capacity continues to grow. It is optimistic that the price of acetic acid will remain high, and the company may continue to benefit as a leader in the stock industry.

The company intends to acquire the new materials company in cash, and the value is expected to be fully revalued. according to the company announcement, the company plans to use 361.5892 million yuan in cash to acquire 100% of Jiangsu Dongpu new materials held by Zhenjiang national control. Dongpu new material has 200,000 tons / year ionic membrane caustic soda, 600,000 tons / year sulfuric acid, 30,000 tons / year benzene chloride, 28,000 tons / year fatty alcohol, 13,000 tons / year adipic acid esterification products and series products, etc., and is under construction of 50,000 tons / year chloroacetic acid project, which is expected to be put into production in 2022 and is expected to generate 240 million yuan per year. The company through the acquisition of new materials, vertical extension of the industrial chain, to further improve the added value of products, the future profit center is expected to rise, optimistic about the overall revaluation of the company's value.

Risk tips: the progress of project construction is not as expected, product prices have fallen sharply, macroeconomic decline, and so on.