Main points of investment:
Events. The company announced on July 1st that the net profit attributable to shareholders of listed companies in the first half of 2017 is expected to be about 220 million yuan to 260 million yuan, an increase of 1684% to 2009% over the same period last year.
The net profit of 2017Q1 Company is 58.493 million yuan. According to the range of pre-increased net profit, the profit range of 2017Q2 in a single quarter is 1.6 ~ 200 million yuan.
Caustic soda maintains high prosperity and customers downstream of liquid chlorine are stable. The company has a production capacity of 720000 tons of caustic soda, 720000 tons of dichloroethane, 600000 tons of liquid chlorine and 80, 000 tons of special resin. The price of caustic soda in East China rose all the way in early July 2016, rising to a maximum of 1115 yuan / ton from 650 yuan / ton in early July 2016. the ex-factory price of some caustic soda enterprises decreased in June, but the range was very small. The price of caustic soda in East China remained at 1090 yuan / ton (source: wind,32% ionic membrane / intermediate price). The liquid chlorine produced in the chlor-alkali process is affected by the downstream market demand, and the product price is so low that the production enterprise even needs to export the liquid chlorine by reverse freight, while the liquid chlorine produced by the company is basically supplied downstream of the chemical work area and transported through the pipeline. The price of caustic soda increased significantly in the first half of 2017 compared with the same period last year, the company's liquid chlorine stable supply to customers downstream of the park, and the stable operation of the production plant with high load was one of the main factors for the company's higher-than-expected performance in the first half of 2017.
Win-win cooperation with the upper and lower reaches of the industrial chain to create a circular economy. In Shanghai Chemical Industrial Park, the company cooperates with international chemical giants such as BASF, Bayer, Huntsman, Kestron and other international chemical giants to provide raw material chlorine and caustic soda for MDI/TDI/PC and other devices in the park, and to use ethylene raw material, secondary chlorine, digest by-product hydrogen chloride, and produce dichloroethane, and raw material chlorine and caustic soda are supplied through pipelines, which ensures the stability and security of supply and saves logistics costs.
We will optimize the industrial layout, relocate and divert, reduce costs and increase efficiency, and initial results have been achieved in light travel. The company has decided to take the Shanghai Chemical Zone as the main battlefield for the company's development, starting from 2013 to implement the adjustment of the wujing area, gradually and orderly shut down the production facilities in the wujing area, and actively and steadily promote the downsizing and diversion of the company's staff. as well as the transfer of 90% equity of Dakai Company, 44% of Tiantan Company, and the transfer of idling building assets of the Group Company, etc., the company focuses on long-term development and takes the initiative to adjust and optimize the industrial layout. Enrich the product structure.
In 2016, the company's wujing regional strategic adjustment was successfully completed, and the results of the reform and adjustment gradually appeared. The relevant costs were lower than the same period last year, which improved the company's performance. At the same time, the company optimized production and operation, improved the management level, and effectively controlled the operating costs.
Profit forecast and investment advice. Under the condition that the price of caustic soda remains high in 2017 and chlor-alkali steadily supplies customers downstream of the park, we estimate that the company's return net profit from 2019 to 2019 will be 402 million yuan, 479 million yuan and 521 million yuan respectively, and the corresponding EPS will be 0.35 yuan per share, 0.41 yuan per share and 0.45 yuan per share respectively. In view of the fact that the company has optimized its industrial structure and improved its operating efficiency, it is in a rising period after the transformation. However, due to the current market valuation of the company is higher than the average level of the same industry, so "temporarily do not rating."
Risk tips: the risk of a sharp fall in the prices of main products, the risk of substantial changes in the cost of raw materials.