Matters
On April 30, 2011, Chitianhua released its first quarterly report of 2011. the company achieved a net profit of 8.9 million belonging to shareholders of listed companies in the first quarter, down 79.97% from the same period last year. Earnings per share were 0.009, down 92.56% from the same period last year.
Main viewpoints
(1) the rising price and insufficient supply of natural gas and the "sluggish peak season" of urea sales are the main reasons for the decline in performance in the first quarter. Since June 2010, the ex-factory price of natural gas has increased by 0.23 yuan per cubic meter, and the transportation cost has increased by 0.08 yuan per cubic meter. calculated according to the consumption of 700 cubic meters of natural gas per ton of urea, natural gas alone will increase the cost of urea per ton by 210 yuan. Due to the insufficient supply of natural gas, the driving time in the first quarter is only more than 30 days. in addition, there is an imbalance between supply and demand in the nitrogen fertilizer market in recent years, urea sales are "not prosperous in the peak season", and the company's sales in the first quarter are not good.
(2) be optimistic about the development prospect of emerging coal chemical industry in the future. Guizhou Tianfu Chemical Co., Ltd., a subsidiary of the company, has an annual output of 300000 tons of synthetic ammonia and 150000 tons of dimethyl ether coal chemical project. It is planned to produce 190000 tons of synthetic ammonia and 100000 tons of dimethyl ether in 11 years. Guizhou Jinchi Chemical Co., Ltd., a wholly-owned subsidiary, has an annual output of 520000 tons of urea and 300000 tons of methanol coal chemical project with an annual investment of 1.8 billion yuan and a cumulative investment of 4.574 billion yuan. the equipment installation is nearing completion and is expected to be completed by the end of the third quarter of 2011 and enter the commissioning and commissioning stage.
With the new coal chemical projects officially put into operation one after another, the company's production capacity and sales income will increase significantly. The regulations of the relevant state departments on curbing overcapacity and repeated construction in some industries have greatly raised the entry threshold for coal chemical projects, which is also good for the company's coal chemical projects.
(3) Huaizi Coal Mine will reduce the cost of the company's coal chemical project. An important feature of coal chemical projects is that there should be water and coal. Guizhou is rich in water resources, and the company's coal chemical projects take the lead in water sources. Huaizi Coal Mine, which is 49% owned by the company, has an annual production capacity of 600000 tons, which can solve the raw coal supply of coal chemical project 1x3, which is a significant reduction in the cost of coal chemical projects.
Profit forecast and investment suggestion
It is predicted that the EPS in 2011, 2012 and 2013 is 0.22 yuan and 0.27 yuan, 0.30 yuan, corresponding to PE32X, 26x and 24x. In view of the successive production of coal chemical projects, maintain the recommended rating.
Risk hints: whether coal chemical projects can operate stably and serious overcapacity of coal chemical products.
