Events:
On October 27, 2021, the company released its quarterly report for the third quarter of 2021: net profit attributable to the owner of the parent company in the first three quarters was 2.163 billion yuan, up 174.84% from the same period last year; operating income was 25.756 billion yuan, up 57.69% from the same period last year; and basic earnings per share was 0.81 yuan, up 153.13% from the same period last year. The company's net profit in the first three quarters is close to the upper limit of the previous three-quarter earnings forecast.
Main points of investment:
The performance is in line with expectations and the control of the three fees is excellent.
2021Q3, the company achieved operating income of 8.006 billion yuan, year-on-year + 24.68%, month-on-month-11.51%; net profit of 694 million yuan, + 122.79% year-on-year, month-on-month; prices of the company's main products methyl ethyl ketone and maleic anhydride rose in the third quarter. We believe that the revenue in the third quarter decreased mainly because the company carried out 35-day routine maintenance of 100,000 tons of methyl ethyl ketone plant in August. The net cash flow generated by the company's operating activities in the third quarter was 349 million yuan; the weighted average ROE was 5.75%, year-on-year + 2.03 pct, month-on-month-1.43 pct. The gross profit margin / net profit rate / expense rate is 13.71%, 8.82%, 3.99%, and-1.93, 0.38, 0.42 pct, respectively.
In terms of three fees, the company's sales / management / financial expense rates are 0.34%, 3.09%, 0.56%, 0.18%, 0.10, 0.14 pct, and 0.04 pct, respectively, compared with the same period last year.
Products are booming in the third quarter and are expected to continue in the fourth quarter.
As the price of maleic anhydride is driven by the downstream product BDO, the economy continues to rise. As the downstream products of maleic anhydride, such as unsaturated resin, enter the peak season of traditional consumption, we think that the prosperity of maleic anhydride will be maintained. The average price of maleic anhydride in the third quarter of 2021 was 11341 yuan / ton, up 12.26% from the previous month to 14369 yuan / ton in October, compared with September + 12.69%. The average price of methyl ethyl ketone in the third quarter of 2021 was 9095 yuan / ton, up 7.67% from the previous month to 9741 yuan / ton in October, compared with September + 13.05%. As the company's 100000 t / a methyl ethyl ketone plant is routinely overhauled for 35 days in the third quarter, we expect that the company's main products methyl ethyl ketone and maleic anhydride are still expected to rise in volume and price compared with the previous quarter.
The PDH project will be put into production soon, and the C3 industrial chain is expected to be expanded.
In order to realize the smooth extension from C 4 to C 3 industry, and to form a relatively perfect C 3 industry chain layout of propane-propylene oxide-propylene oxide, the company invested in the construction of 700,000 tons / year propane dehydrogenation project in April 2019, with an estimated construction period of 24 months; in August 2019, the company invested in the construction of 300,000 tons / year propylene oxide project, which is expected to take 24 months. The company also plans to invest 200,000 tons / year isononanol project in April 2020, with a construction period of 2 years. In the C4 plate, the company plans to continue to expand its production capacity of 80,000 tons / year of methyl ethyl ketone and 200,000 tons / year of maleic anhydride. After the completion of production expansion, the production capacity of methyl ethyl ketone / maleic anhydride will reach 26.4 million tons / year. The company continues to make efforts on more than C3 and C4 products, and we are optimistic that a number of projects will bring new growth to the company after they are put into production in the future.
Profit forecast and investment rating: the company is the leader of the C4 industrial chain, and its net profit in 2021, 2022 and 2023 is expected to be 30.65,38.38 and 4.084 billion yuan respectively, corresponding to PE7/6/5 times, maintaining the "buy" rating.
Risk tips: macroeconomic fluctuation risk; environmental protection risk; production safety risk; business risk; exchange rate fluctuation risk.