Events:
The company released its semi-annual report for 2017, with operating income of 1.365 billion yuan, an increase of 0.44% over the same period last year; net profit of 782000 yuan, down 35.85% from the same period last year; net profit of 3.625 million yuan, down 5.66% from the same period last year; and basic earnings per share of 0.0016 yuan.
Comments:
1. The sales performance of refined oil products is stable, and the gross profit margin has dropped slightly.
The company's revenue in the first half of the year was 1.365 billion yuan, an increase of 0.44% over the same period last year, of which Q2 revenue was 684 million yuan, down 3.74% from the same period last year. The management fee was 18.84 million yuan, down 20% from the same period last year; the financial cost was 2.21 million yuan, down 24% from the same period last year, mainly due to the reduction in collection fees for gas stations during the period. The company's operating income of gasoline products is 784 million yuan, and the gross profit margin is down 1.97% compared with the same period last year; the operating income of diesel products is 509 million yuan, and the gross profit margin is up 1.99%; and the revenue of natural gas products is 7.14 million yuan, and the gross profit margin is down 5.32%.
2. It is expected to benefit from national reform and oil and gas reform
Taishan Petroleum Co., Ltd., a sales company under China Petroleum & Chemical, was listed on the Shenzhen Stock Exchange on December 15, 1993. It is mainly engaged in wholesale and retail of oil products and retail of natural gas. As of June 30, 2017, the company has merged 5 subsidiaries, respectively in Tai'an, Qingdao and Qufu. In the first half of 2017, the company achieved a total distribution of 220000 tons of oil products and 218 million cubic meters of natural gas.
On May 21 this year, the CPC Central Committee and the State Council issued several opinions on deepening the Reform of the Oil and Gas system, encouraging oil enterprises to develop diversified equity and various forms of mixed ownership. Under the dual background of state-owned enterprise reform and oil and gas reform, the company, as the listing platform of China Petroleum & Chemical, has the expectation of reform and reorganization.
3. Investment suggestions
We estimate that the net profits belonging to shareholders of listed companies from 2017 to 2019 are 5.8 million yuan, 10.5 million yuan and 11.8 million yuan respectively, corresponding to EPS 0.01,0.02,0.02 yuan respectively; corresponding to the current share price of 11.22 yuan, PE is 935,516 and 457 times respectively, covering for the first time and not rating for the time being.
Risk hint: the risk of falling international oil prices and declining profits of chemical products.