occurrences
The company released its report for the third quarter of 2022:22Q3 achieved revenue of 246 million yuan, -19.3% year on year; achieved net profit of 26 million yuan, -27.2% year on year; achieved net profit of 21 million yuan after deduction, -32.1% year on year. In the first three quarters of 2022, the company achieved revenue of 842 million yuan, or -9.96% year on year; achieved net profit of 116 million yuan, -5.41% year on year; and achieved net profit of 104 million yuan after deduction, -4.10% year on year.
Brief review
Market demand for main products is weak, and Q3 performance is under pressure. 22Q3 achieved revenue of 246 million yuan, or -19.3% year on year; net profit returned to the mother was 26 million yuan, -27.2% year on year; net profit returned to the mother after deduction was 21 million yuan, -32.1% year on year. In the first three quarters of 2022, the company achieved revenue of 842 million yuan, or -9.96% year on year; achieved net profit of 116 million yuan, -5.41% year on year; and achieved net profit of 104 million yuan after deduction, -4.10% year on year. In the third quarter, the company's projects were under construction +35.9%, mainly due to investment in R&D buildings; financial expenses -443.7%, mainly due to increased exchange earnings; non-operating expenses +256.3%, mainly due to the shutdown loss of some Huai'an Chenhua production lines.
Polyetheramine prices are low, and profits are expected to pick up as demand recovers. The price of the company's main product, polyetheramine Q3, has declined somewhat. According to Baichuan Yingfu, the average price of D230 in East China was 27,500 yuan/ton, -24.9% over the previous month. In terms of prices of major raw materials, the price of propane oxide has declined somewhat. As of mid-October, the average price of propane oxide was 106,600 yuan/ton in 22, or -36.3% over the same period last year; among them, the average price in Q3 was 0.93 million yuan/ton. Since this year, wind power tenders and installed capacity have maintained a year-on-year increase. With the gradual fulfillment and delivery of tender orders and the arrival of the peak installation season at the end of the year, the wind power sector is expected to drive demand for polyetheramine and drive up the profit level of polyetheramine.
Maintenance capacity has been restored, and plans for additional production capacity are progressing steadily. From August 1 to 10, 2022, the company stopped production and overhauled Huai'an Chenhua's polyetheramine (continuous method) production line in accordance with the operating cycle of each production plant of the polyetheramine (continuous method) production line of the polyetheramine (continuous method) production line in Huai'an City, in line with the requirements of full-process automation control and transformation of key chemical enterprises in Huai'an City, which had a certain impact on the results of the third quarter. At present, the production capacity of the production line has been fully restored, and the stability and safety of the overhauled production line have been further improved, effectively improving production and operation efficiency. Currently, the company has a nominal production capacity of 31,000 tons of polyetheramine, of which the production capacity of polyetheramine produced using a continuous process is 20,000 tons/year. The company also plans to invest in the construction of a project with an annual output of 40,000 tons of polyetheramine and 42,000 tons of polyether in Jiangsu Huai'an Industrial Park. On July 7, 2022, the 40,000 ton polyetheramine project obtained the Jiangsu investment project registration certificate. Currently, project construction is progressing steadily. After commissioning, it will help save labor costs, generate scale effects on energy costs and reduce investment costs, further enhance the company's core competitiveness, and the company's production capacity advantage will be further consolidated.
Profit forecast and valuation: The company's net profit for 2022, 2023, and 2024 is expected to be 156 million, 197 million and 234 million yuan respectively; EPS is 0.7 yuan, 0.9 yuan and 1.1 yuan respectively; PE is 19.2X, 15.2X, and 12.8X respectively, maintaining the “buy” rating.
Risk warning: (1) the progress and construction of the 40,000-ton polyetheramine and 42,000-ton polyether project that the company plans to invest in Huai'an Industrial Park in Jiangsu fell short of expectations; (2) prices of major raw materials such as propane oxide rose, increasing enterprise cost pressure and thereby reducing profit space; (3) changes in the industry competition pattern and downstream demand for major products such as polyetheramines, polyethers, alkyl glycosides, flame retardants, etc., fell short of expectations, affecting the company's main product sales; (4) considering environmental protection risks and production safety risks; (5) considering the company's environmental protection risks and production safety risks; (5) Taking into account environmental protection risks and production safety risks; (5) considering the company's environmental protection risks and production safety risks; (5) considering the company's environmental protection risks and production safety risks; (5) considering the company's environmental protection risks and production safety risks; (5) Taking into account environmental protection risks and production safety risks; (5) considering the company's environmental protection risks and production safety risks; (5) Taking into account environmental protection risks and production safety risks; The product polyetheramine is under short-term pressure, and the price difference As a result of the narrowing, the company's profits have been damaged and under pressure since the third quarter. The third quarter's results have declined a lot month-on-month. The company's profit forecasts have been lowered to net profit of 156 million, 197 million, and 234 million, respectively.