Steady growth of world polyolefin production and consumption

The global polyolefin industry has shifted from Europe and America to the Middle East and Asia-Pacific.

It is difficult for the company to separate propylene and achieve high olefin growth.

1. Hydrocarbons and derivatives drive the industry to earn more than expected, but it is difficult for the company to achieve high olefin growth due to the separation of propylene.

2. The price of propylene is expected to rise in 2010, but it can not increase the gross profit of polypropylene.

Propylene oxide consumption downstream of propylene is promising.

There will not be much increase in propylene plants at home and abroad in the next few years. International oil prices are unlikely to rise significantly in the context of oversupply, and will continue to operate in the 2010 N-type trend.

According to the comprehensive calculation of each business, we expect the company to earn 0.30 yuan per share in 2010, 0.35 yuan in 2011 and 0.40 yuan in 2012.

The reasonable range of sensitivity analysis of DCF-WACC model is 5.63-7.35 yuan.

The range of valuation is 5.15-5.78 yuan, and the average range is 5.39-6.57 yuan.

Downstream recovery and monopoly determine the high profits of the three major synthetic materials, and we judge that olefins will drive the petrochemical industry to enter the business cycle ahead of schedule in the first half of 2010. Maohua Shihua mainly specializes in polypropylene, but because the company is to separate propylene gas, and then produce polypropylene, there is no cracking furnace, propylene prices are rising, but can not improve the company's polypropylene gross profit. The company's profit forecast for 2010-2012 is 0.30,0.35 and 0.40 yuan, which is given a neutral rating.

Main risk factors

The petrochemical industry has a strong correlation with international oil prices, and the range of changes in international oil prices is relatively large, which goes up or down far beyond our predicted fluctuation range.