Event

The company issued a half-year performance forecast for 2022: the net profit for 2022 is expected to be 0.9-95 million yuan, an increase of 3.36%-9.11% over the same period last year; corresponding to Q2, it is expected to achieve a net profit of 0.49-54 million yuan for a single quarter, an increase of 19.5% over Q1. 31.7%.

Brief comment

Main business support, steady growth of performance

The company expects to achieve a net profit of 0.9 to 95 million yuan in 2022, an increase of 3.36 percent to 9.11 percent over the same period last year, and a deduction of 0.82 to 87 million yuan, an increase of 5.33 percent and 11.75 percent over the same period last year. In 2022, Q2 is expected to achieve a net profit of 0.49-54 million yuan in a single quarter, an increase of 19.5 percent, 31.7 percent, 0.43-48 million yuan, and an increase of 10.3 percent, 23.1 percent over the previous quarter. In the first half of the year, the company maintained a stable profit level under the influence of multiple factors such as epidemic situation and production line debugging. At present, the price of polyetheramine, the company's main profitable product, is on the rise. In the second half of the year, with the decline in the price of main raw materials, the increase in the output of polyetheramine and the stability of traditional business, the performance of the company is expected to climb another high-rise.

The polyetheramine production line fully resumes production, and the performance improvement in the second half of the year is expected.

H1 in 22, affected by equipment commissioning, the company's main product polyetheramine production capacity was not fully released, while the epidemic affected part of the terminal demand. Since June, the company has fully resumed production of 28000 tons, and the capacity utilization rate has remained high. The production capacity of 3000 tons in the intermittent method has been steadily advanced, and the production and sales volume will be greatly improved in the second half of the year. In addition, due to the expansion of production in the polyetheramine industry, the average price of H1 is 11000 yuan / ton this year, which is significantly lower than the 21-year average price of 16700 yuan / ton. since July, the average price has further dropped to 0.9500 yuan / ton. the decline in raw material prices has significantly increased the profit per ton of polyetheramine, and under the double improvement of profitability and production and marketing, the company's H2 performance contribution of polyetheramine products will be significantly improved. On July 7, Huaian Chenhua, a wholly owned subsidiary of the company, won the record certificate of investment project in Jiangsu Province with an annual output of 40,000 tons of polyetheramine, so that the company will still occupy a favorable position in the future industry competition.

Wind power bidding speed-up superposition policy is good, polyetheramine downstream demand is strong as an excellent epoxy curing agent, with the characteristics of low viscosity and long service life, it is an indispensable front-end raw material for wind power blade manufacturing. Internationally, the war between Russia and Ukraine accelerates the construction of clean energy in Europe; domestically, under the background of the double-carbon strategy, the planning and layout of the wind power industry is gradually increasing. According to the statistics of CITIC Construction and Investment New Energy, the tender volume of wind turbines in the first half of this year exceeded 50GW, reaching the level of the whole of last year. It is expected that the bidding for the whole year will reach 80-100GW, with a substantial increase in 22 years on the basis of an increase of 70% in 21 years. In China's 14th five-year Plan, the average annual installed capacity of wind power should not be lower than 60GW after 2025, at least 800GW by 2030 and 3000GW by 2060, which will provide long-term support for the downstream market of polyetheramine, and the demand is expected to maintain a high growth rate in the future.

Profit forecast and valuation: the company's net profit in 2022, 2023 and 2024 is expected to be 2.39,3.56 and 421 million yuan respectively, corresponding to a PE of 17.4,11.7,9.9 times, maintaining a "buy" rating.

Risk analysis: market competition risk, environmental protection risk, production safety risk, raw material price fluctuation risk, project progress is not as expected, etc.