Main points of investment:
The company's profit growth still comes from polypropylene, solvent oil and ethanolamine. In 2008, the company produced 159800 tons of polypropylene and 31600 tons of solvent oil, with a gross profit margin of 7% and 6.34% respectively. The former contributed operating income of 1.511 billion yuan, accounting for 76% of the effective income. The operating income of solvent oil and ethanolamine accounted for 24% of the effective income. The company plans to produce 161000 tons of polypropylene in 2009, 31800 tons of solvent oil and 6643 tons of ethanolamine, basically the same as last year, and this year's gross profit margin will be higher than last year, but the improvement is limited because downstream demand is still weak. [Table_Summary]
The future profit growth point can be seen that the 40,000 ton / year ethanolamine project of the 40,000 ton ethanolamine project company has been approved by the shareholders' meeting, the project construction is progressing smoothly, and the process package design contract has been signed with Sulzer Company. the Provincial Economic and Trade Commission has approved the establishment of the project, and the project design work is currently under way. It is expected that the construction period of the project is about 1 year. Considering the delay of setting up the project and other factors, production can be reached in about 1.5 years, which will enhance the profitability of the company.
LPG basically keeps break-even the LPG produced in the refining process of the company is sold by Maoming Shihua, which is mainly sold to tens of thousands of employees of Maoming Shihua, so it basically maintains the breakeven.
Procurement is relatively concentrated, sales are relatively scattered, the top five purchasers account for 99.46%, quite concentrated, the main purchasers are Maoming Shihua; the top five sellers of the company account for 23.29%, relatively scattered, in line with the situation of the industry. Procurement and sales prices are basically carried out according to the market price, so the company's profits are in line with the industry level.
Investment advice:
The company's main products are still downstream chemical products, and the future profit growth point will depend on the 40,000-ton ethanolamine project, but we believe that at this stage, the investment opportunities are still concentrated in the upstream, and the company's investment opportunities still need to wait. Give the company a neutral investment rating.