Pre-increase announcement: the company expects cumulative net profit from January to September 2009 to increase by 50% and 70% over the same period last year.
(1), polypropylene, solvent oil and other markets are improving.
The company's main products are polypropylene, solvent oil, ethanolamine, liquefied gas, hydrocarbon propellant and so on. In the first half of 2009, a total of 75400 tons of polypropylene, 15900 tons of solvent oil products, 2449 tons of ethanolamine products. The domestic market of polypropylene, solvent oil, ethanolamine and liquefied petroleum gas has obviously rebounded in the second and third quarters of 2009 (as shown in figure 1). Therefore, the improvement of polypropylene, solvent oil and other markets is the main reason for the company's pre-growth. We expect that polypropylene, solvent oil and other markets will still maintain the current good performance in the fourth quarter, and the company's performance growth in 2009 has become a foregone conclusion. We expect the company to achieve an 11-fold increase in performance due to the fact that the company has only 0.025 yuan in 2008 with EPS0.30 yuan in 2009.
(2) the improvement of refinery profits is the key.
As the company mainly relies on China Petroleum & Chemical Corp's Maoming branch refinery, the refinery is the largest refinery in China, and its operating performance has a great impact on the company. Since the beginning of this year, the state has issued the measures for the Management of Oil prices, and seven price adjustments have been carried out in accordance with the new measures for the Management of Oil prices. Each price adjustment is based on changes in international oil prices. Therefore, the refinery gross margin can reverse the situation that has changed greatly due to the change of raw material price in the past, and the current refining gross margin is basically stable at about 4 US dollars / barrel. Therefore, the profitability of the refinery has been significantly improved, which can be verified by the improvement of the refining business of China Petroleum & Chemical and Petrochina. Although the refinery of Maoming Branch shut down and overhauled the catalytic unit for 50 days in the second quarter, affecting the company's raw material supply, the company's raw material supply improved significantly in the third quarter, and the company's main production units were produced at full capacity. We expect the company to produce about 40, 000 tons of polypropylene and 8000 tons of solvent oil products in the third quarter of 2009, with a production and marketing rate of more than 99%.
(3) three major factors promote the improvement of oil consumption, and the prices of polypropylene, solvent oil and other products continue to be optimistic.
At present, global oil consumption has significantly improved with the economic recovery, the growth of oil consumption in the United States and other developed countries has changed from negative to positive, and the growth of oil consumption in developing countries such as China has increased by more than 10%. The growth of this kind of oil consumption mainly comes from three aspects: first, the recovery of the global economy has led to the growth of private consumption confidence, which has led to the growth of downstream oil consumption. For example, the consumption of dyes and auxiliaries and cars are growing rapidly at present. In particular, the growth of consumption in developed countries has led to a sharp increase in China's dyestuff exports, and the consumption of dyes and auxiliaries has led to the growth of oil consumption from the far end of the industrial chain. Second, major oil consuming countries such as China, the United States and India have recently increased their strategic oil reserves. with the completion of China's four strategic reserves, domestic strategic oil reserves are growing day by day. As shown in the chart below, the strategic reserve of the United States has also seen a relatively rapid growth recently. Third, with the arrival of the winter heating season in the northern hemisphere, the world's major oil companies are bound to increase their heating oil reserves. Although some people predict that the phenomenon of warm winter this year is more obvious, oil reserves will not be changed because of the uncertain factors of weather forecast.
The recent ministerial meeting of the Organization of Petroleum Exporting countries (OPEC) agreed to keep the production of oil member countries unchanged, which is why the Organization has maintained production quotas for many times. Because of the growth of economic activity, especially the economic recovery of big countries such as China and the United States, OPEC was more confident and decided to keep its daily oil production unchanged at 24.845 million barrels. With the improvement of the global economy, oil stocks except distillates have dropped significantly at present. we expect that with the advent of the winter heating oil storage season in the Northern Hemisphere, oil inventories will decline in an all-round way, and the world oil demand will return to the dawn of recovery. international oil prices will break through horizontal consolidation and steadily oscillate upward, driving up the prices of petrochemical and chemical products such as polypropylene and solvent oil, making a good time for moderate inflation in the whole industry.
Although the "measures for the Management of Oil prices" is an excessive policy, the price adjustment of oil products is much more timely than before, and the gross profit of oil refining will be relatively stable in the future. Maohua Shihua relies on the largest Maoming Refinery in China and has an adequate supply of raw materials. with the improvement of oil refining performance, the performance continues to improve. Our profit forecasts for 2009-2011 are 0.30,0.36 and 0.41 yuan, respectively, which are 26.8,22.3 and 19.6 times the current share price PE, so we give Maohua Shihua cautious recommendation rating.