22H1's home net profit increased slightly compared with the same period last year, maintaining the "overweight" rating.
Chenghua shares released semi-annual report, H1 revenue of 596 million yuan, yoy-5%, return net profit of 90 million yuan, yoy+4%; of which Q2 revenue of 323 million yuan, month-on-month ratio of-1% to 18%, return to home net profit of 49 million yuan, an increase of 33% over the same month by 18%, mainly due to the rebound in polyetheramine production and better profits. We maintain the 22-24 performance forecast of 2.20 EPS 2.56 shock 286 million yuan, corresponding to 1.03 shock 1.20 shock 1.34 yuan, combined with the 22-year Wind consensus expected average 18xPE valuation of comparable companies, giving the company 22-year 18xPE with a target price of 18.54 yuan (the previous value is 15.45 yuan) and maintaining the "overweight" rating.
The continued expansion of surfactant business revenue led to the overall gross profit margin rising in the first half of 2022. The average price of polyetheramine in 22H1 East China market D230 was 386,000 yuan / ton, up 51% from the same period last year, and the price gap still widened. Alkyl glycosides benefited from strong demand such as glyphosate water agent. The company's surfactant sector achieved revenue of 440 million yuan, an increase of 16.4% over the same period last year, and gross profit margin increased to 32.5%. The revenue of the flame retardant business during the reporting period was 99 million yuan, down 47.9% from the same period last year, and the gross profit margin was reduced by 9.5pct to 12.7%. The silicone rubber business achieved a revenue of 55 million yuan and a gross profit margin of 12.2%.
At the subsidiary level, Huaian Chenghua achieved a net profit of 44 million yuan, unchanged from the same period last year. The company's sales / management / finance / R & D expense rates are 2.9%, 5.3%, 0.2%, 4.2%, respectively, with year-on-year changes + 0.12/+0.65/-0.34/+0.57pct.
The lack of periodic demand and the decline in raw materials led to the weakness of polyetheramine, and the profit is still good. Since Q3, due to the weakening direct demand downstream such as wind power blades, and the decline in the price of raw material propylene oxide / propylene glycol, according to Baichuan Yingfu, the price of polyetheramine products has dropped significantly since July 8. East China D230 quoted 25,000 yuan / ton on August 19, Q3 dropped 26%, due to the year-on-year decline of raw materials. At present, the profit of polyetheramine still maintains a high level, considering the peak demand for polyetheramine installed in the second half of the year is still expected to gradually improve. The company plans to build a 40,000-ton polyetheramine project and plans to start construction in 2022. With the growth of wind power and paint demand, polyetheramine still has market development potential.
Risk hint: downstream demand weakening risk, new project progress does not meet the expected risk.
