1Q22's net profit from homing has declined. In the first quarter of 2022, the company achieved operating income of 10.694 billion yuan, year-on-year + 37.88%; net profit of 284 million yuan, year-on-year-45.12%, month-on-month-23.71%; basic earnings per share 0.18 yuan.

Oil prices are up and sales are down. 1Q22, under the influence of tension between Russia and Ukraine and other factors, international oil prices have risen sharply, with Brent oil prices averaging $97.90 per barrel, + 60% year-on-year and + 23% month-on-month. Driven by international oil prices, the company's product prices rose, driving revenue growth compared with the same period last year; while affected by the epidemic, the company's sales declined, and the company's income dropped from the previous month.

Gross profit margin is stable on a month-on-month basis. 1Q22, the company's gross profit margin of 23.24%, basically unchanged from the previous month, a slight increase of 2.68% compared with the same period last year.

The sales of taxable products increased, and corporate taxes and surcharges increased by a large margin. In the first quarter of 2022, corporate taxes and surcharges totaled 1.586 billion yuan, an increase of 1.188 billion yuan over the same period last year. According to the company's quarterly report, sales of taxable consumer goods increased mainly due to market demand.

Profit forecast and investment rating. We estimate that the return net profit of the company from 2022 to 2024 is 780 million yuan, 1.04 billion yuan and 1.13 billion yuan respectively, the EPS is 0.49,0.65,0.70 yuan respectively, and the BPS is 9.23 yuan in 2022. With reference to the valuation level of comparable companies, it is given 0.75-0.85 times PB in 2022, corresponding to a reasonable value range of 6.92-7.85 yuan (corresponding to 14-16 times PE in 2022), maintaining "better than the big market".

Rating.

Risk tips: falling international crude oil prices, lower-than-expected profits of petrochemical products, etc.