Event: the company announced that the total operating income was 3.9706277 billion yuan, up 2.26% from the same period last year; the operating cost was 3.6676866 billion yuan, up 13.15% from the same period last year; the total realized profit and the net profit belonging to the owner of the parent company were-621.4164 million yuan and-62807.15 yuan, respectively, down 4166.52% and 5414.34% respectively. In line with the previous performance KuaiBao expectations.
The company is the leader of the combined alkali process, and the market of soda ash and ammonium chloride has warmed up: in the two major production processes of soda ash, the products of the ammonia alkali method are soda ash + calcium chloride, and the products of the combined alkali method are soda ash + ammonium chloride. There is calcium chloride solid waste pollution in ammonia-alkali method, but the profitability of ammonia-alkali method is better than that of combined alkali method when ammonium chloride is less than 400 yuan per ton. this round of ammonium chloride price rises from 350 yuan / ton to 560 yuan / ton with urea, reversing the declining trend of combined alkali method. at present, the profit of the combined alkali method is relatively stable, and the profit per ton is more than 100 yuan under the current price. The price of soda ash has risen from 1390 yuan in July 16 to 1850 yuan / ton at present, which is lower than the high point of 2150 yuan / ton in February, but there is still room for profit. The company has a production capacity of 1.8 million tons of soda ash and 1.8 million tons of ammonium chloride. due to parking and overhauling some sections of the production system during the reporting period, the output of the company's main products decreased, coupled with the simultaneous rise in the procurement cost of raw materials and the cost of purchased electricity in 2016. caused the company to make a big loss.
The edible salt business has benefited from the liberalization of the salt monopoly, and the sales volume has increased significantly: the company, Chongqing Suote, has the qualification of designated salt production, with a production capacity of 1.3 million tons and excellent quality. In 16 years, the company sold about 130000 tons of edible salt to the salt company, and the company actively stored in advance before the salt reform in 17 years, and now it has developed three major brands: Soter, salt chef and salt shadow, docking the surrounding food processing plants and merchants, opening up the third-party logistics and building its own logistics network with the county as the unit. In 17 years, it is expected to launch the app order system. The salt reform plan predicts that salt will be included in food management in the future, and the company has taken the lead in preparing for the separation of salt from chemical plants. The complete cost of 25 kg salt is about 300 yuan / ton, and the price is 500 yuan / ton, which is much lower than 800 yuan / ton of salt company. In 16 years, the company sold 25000 tons of salt in small bags and nearly 100000 tons in large packages. According to the grass-roots research, we estimate that the sales volume of salt in small bags will increase to 5-100000 tons in 17 years, and 10-150000 tons in large packages, which is expected to bring a profit of 4000-50 million.
Additional issuance to carry out energy-saving transformation of coal gasification, reduce cost and increase efficiency: the company issued no more than 92.82 million shares to raise a total of no more than 1.12577 billion yuan for coal gasification energy-saving transformation of Hubei and Chongqing pure alkali production bases. The investment of Yingcheng base in Hubei is about 700 million yuan, and that of Chongqing base is about 500 million yuan. The renovation plan started in October 16 and is scheduled to be put into production around October 18. According to the feasibility study, it is estimated that after the coal gasification transformation, 400 million kilowatt-hours of electricity and 160000 tons of standard coal will be saved, the cost will be saved more than 200 million yuan, and the annual profit is expected to increase by about 60 million.
Investment suggestion: we estimate that the EPS of the company from 2017 to 2019 will be 0.46,0.55 and 0.66 yuan respectively. The company's operating inflection point has emerged. After 16 years of baggage and 17 young outfits, we give the buy-An investment rating, with a 6-month target price of 11.40 yuan, which is equivalent to a dynamic price-to-earnings ratio of 25 times in 2017.
Risk tips: the risk of falling soda ash price, ammonium chloride price and so on.