Event: the company released its three-quarter report on October 26, with revenue of 5.414 billion yuan in the first three quarters, an increase of 7.82% over the same period last year, and a non-net profit of 614 million yuan, an increase of 1137.74% over the same period last year. The performance growth was mainly driven by the rising price of caustic soda, the leading product.
The imbalance of chlor-alkali has increased, and the high prosperity of the caustic soda industry is expected to continue: September and October are the traditional peak season for the sale of liquid chlorine. Since September, the price of liquid chlorine has dropped instead of rising. In October, the average price of liquid chlorine (northeast region) was 300 yuan / ton, down 50% from 600 yuan / ton at the beginning of January. Poor sales of liquid chlorine is the main reason for the low price. Liquid chlorine as a by-product of caustic soda, the increase of its sales has promoted the price of caustic soda to go up further. According to Longzhong Chemical, the average price of caustic soda in North China rose to 1279 yuan / ton on October 22, up 33.1% from the average price of 961 yuan / ton in September. We believe that with the aggravation of the chlor-alkali imbalance, the high prosperity of the caustic soda industry is expected to continue.
The park integrated industrial chain mode, the sales channel is smooth: the company announcement cooperates closely with the international chemical giant, and has established the integrated operation mode of equipment matching and pipeline transportation in the chemical industry zone.
The company provides raw material chlorine and caustic soda for the main MDI/TDI/PC of the park, and uses ethylene raw material, secondary chlorine to digest by-product hydrogen chloride gas. The liquid chlorine produced by the company is basically supplied to the downstream of the chemical work area. The mode of park integration reduces the logistics cost and improves the company's ability of long-term stable survival and development. Under the integration mode, the sales channel of the company's products such as liquid chlorine is smooth under the background of the downturn of the industry and the increasing intensity of freight.
Actively accelerate the pace of "going out", investment income to contribute profits: according to the announcement, the company currently participates in Huntsman and Lianheng's MDI project, the company's MDI equity production capacity of 120000 tons of refined MDI, 72000 tons of crude MDI. In addition, the joint venture between the company and Junzheng Energy plans to build a seed emulsion paste resin project with an annual output of 200000 tons, which is expected to be put into production by the end of 17th. During the reporting period, the company's investment income reached 180 million yuan, contributing to the thickening of the company's performance.
Investment suggestion: we expect the EPS of the company from 17 to 19 years to be 0.8,1.2,1.4 yuan respectively, of which 17 years will turn a loss into a profit. The investment rating of Buy-An is given for the first time, and the 6-month target price is 16 yuan.
Risk hint: the downstream demand of caustic soda is lower than expected, and the demand of liquid chlorine is better than expected.