The performance in 2010 is in line with the company's annual target, and the performance in the first quarter of 2011 is lower than expected.
Since September 2010, the price of BDO, the company's main product, has entered the upward channel. Although it lost money in the first half of the year, it has made a profit in the third and fourth quarters. From the annual performance point of view, basically in line with the company's net profit target of 30 million yuan.
In the context of the continuation of the BDO boom, the first quarter of 2011 performance is lower than we expected, we believe that the Spring Festival off-season, the implementation of pre-low-cost contracts and other factors may be the main reasons for the performance can not rise significantly.
2. Still optimistic about the profitability of the company's BDO series products this year
The investment cycle determines the arrival of the BDO business cycle, and the contradiction between supply and demand of new BDO production capacity and new downstream demand in 2011 will also ensure the continuation of the current boom. The production cycle of BDO capacity construction is about two years. Due to the economic trough in 2008 and 2009, the domestic new production capacity of BDO is limited from last year to this year, while the real effective production capacity is not more than 120000 tons, and may be in the second half of this year. In the downstream field, spandex and PBT resin, by the end of last year, China's new spandex production capacity will reach about 120000 tons (BDO demand 130000 tons); this year, the new PBT resin production capacity will reach 60, 000 tons (maleic anhydride BDO demand 25000 tons).
Since September last year, the price of BDO has been fluctuating at the level of 20, 000 yuan / ton, which is relatively high in history. It is expected that the prosperity of BDO will be maintained this year.
3. Pay attention to the company's efforts to "lengthen and thicken the industrial chain" in order to achieve the strategic goal of "10 billion in five years".
The company's 2009 annual report puts forward the strategic goal of "ten billion in five years", and "lengthening and thickening the industrial chain" is an important business idea. And Yang Coal to become the actual controller of the company will also contribute to the realization of the company's strategic goals.
4. Maintain the company's "highly recommended-B" investment rating
According to the forecast of our previous report, the company's EPS for 10-12 years is expected to be 0.09,0.78 and 0.85 yuan respectively, which is based on several main assumptions: the prosperity of this year's EPS is only slightly higher than the historical normal level, and the operating rate of 75000 tons of maleic anhydride BDO plant is about 50%. Judging from the current BDO market, BDO will maintain a high scene in 2011, while the 75000-ton maleic anhydride BDO plant will enter trial production again after the equipment failure is resolved due to problems with one of the major equipment at the end of last year. For the time being, we maintain our previous profit forecast and maintain the target price of 15.6 yuan.
