Events:
The company released its quarterly report for 2017, with operating income of 2.002 billion yuan, down 2.47% from the same period last year; net profit of 1.6597 million yuan, down 45.12% from the same period last year; net profit after deducting 6.837 million yuan, an increase of 0.05% over the same period last year; and basic earnings per share of 0.0035 yuan.
Comments:
1. The operating income decreased slightly compared with the same period last year, and the net interest rate increased steadily.
The company's revenue in the first three quarters was 2.002 billion yuan, down 2.47% from the same period last year, and the net profit returned to its mother was 1.6597 million yuan, down 45.12% from the same period last year. The revenue of Q3 was 637 million yuan, down 8.17% from the same period last year, and the net profit of returning home was 877000 yuan, down 51.38% from the same period last year. In the first three quarters, the company's management expenses and financial expenses decreased significantly, the cost decreased, and the cash flow was better. Since the beginning of this year, the revenue of gasoline products, diesel products and natural gas products has been stable, and the level of net interest rate is relatively stable, of which the net interest rate of Q3 is 0.15%.
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 8.93 yuan, PE is 744,410 and 363 times, respectively.
Risk hint: the risk of falling international oil prices and declining profits of chemical products.