Performance summary: in the first half of 2015, the company achieved operating income of 810 million yuan, an increase of 44.7% over the same period last year; net profit of 26.1 million yuan, an increase of 181.8% over the same period last year; operating income of 420 million yuan in Q2 quarter, an increase of 79.8% over the same period last year, and an increase of 8.2% over Q1; the net profit attributed to the parent company was 14.17 million yuan, an increase of 1229% over the same period last year, and an increase of 18.8% over Q1.
Surmount every layer of difficulty, the bottom of 2015 performance reversed. The company's main production facilities were shut down and overhauled in 2014, coinciding with a sharp drop in crude oil prices, affecting the company's performance. In the past 15 years, the main production units have been put into normal production, cost control has achieved initial results, the unit consumption of propylene in polypropylene plant has dropped to a historical low, the unit processing cost of the gas branch plant has been greatly reduced through process optimization and transformation, and the price of the main chemical products has rebounded, restricting the company's obstacles have been crossed, and the bottom of the performance reversal is certain.
The upgrading of oil products adds power, and o-cresol is put into production. The executive meeting of the State Council decided to speed up measures to upgrade the quality of oil products and promote the control of air pollution and the technological upgrading of enterprises. In the process of oil and gas upgrading, blended gasoline made from products with high octane number is more popular because of its low price and quantity flexibility. MTBE will still be the main gasoline blending component in China because of its excellent performance. As the main profitable product of the company, low-sulfur and high-quality MTBE will be favored by the market and develop vigorously. O-cresol is a relatively scarce fine chemical in China, which has good development potential and market prospects. as o-cresol is put into production, it will optimize the company's product structure and add a boost to the company's growth.
Biological vaccines open up endless space for imagination. The oral recombinant Helicobacter pylori vaccine developed by Wuhu Kangwei, a subsidiary of Yueyang Xingchang, as a first-class new drug biological drug, has been approved by the State Drug Administration in 2009. Helicobacter pylori is the main cause of most gastric diseases, and the global infection rate is 50%. At present, there is no similar vaccine in the world. In 2009, the price of the vaccine described by the company is 200-300 yuan per person, and the demand for the pre-sale price of the vaccine is huge. It is estimated that the reasonable ex-factory price should be about 780 yuan per person.
The initial market space will reach about 66 billion, followed by vaccine development, the market capacity will be further expanded. However, the progress of the project is lower than expected.
Earnings forecast and rating: the company shows the effect of cost control and the upgrading of oil products leads to better demand, we expect the company's earnings per share to be 0.31,0.35 and 0.47 yuan from 2015 to 2017. The corresponding dynamic PE were 72 times, 64 times and 47 times, respectively, and were downgraded to "overweight" due to the lower-than-expected vaccine progress.
Risk hints: the risk of lower-than-expected upgrading of oil products; the risk of insufficient release of o-cresol production; and the risk of stomach disease vaccines being put on the market.