Events:
The company released its quarterly report for 2017. during the reporting period, the operating income was 9.293 billion yuan, an increase of 52.63% over the same period last year. The net profit belonging to shareholders of listed companies was 177 million yuan, down 29.96% from the same period last year. The net profit after deduction belonging to shareholders of listed companies was 10800 yuan, an increase of 399.17% over the same period last year, and EPS 0.22 yuan. Of this total, Q3 achieved a net profit of 62.76 million yuan, down 45.35 percent from the same period last year and an increase of 98.78 percent from the previous month.
Comments:
1. The main business has obviously improved, but the decrease in non-operating income has led to a decline in the company's performance.
In the first three quarters of 2017, the company achieved operating income of 9.293 billion yuan, an increase of 52.63% over the same period last year. The company's revenue increased significantly, mainly from the increase in production and sales of paste resin, the rise in caustic soda quantity and price, and the increase in revenue from acrylic acid and ester business. the company's new paste resin plant was only put into production in the first half of 2016, so its production and sales volume was still relatively low, and its production and sales volume increased significantly in 2017. In 2017, the price of caustic soda continued to rise, and the operating income of the company's caustic soda business increased significantly; in the first three quarters of 2017, the price of acrylic acid and ester increased significantly compared with the same period last year, the profit improved, and the operating income of the company's acrylic acid and ester business increased significantly.
In the first three quarters of 2017, the company achieved a net profit of 177 million yuan belonging to listed companies, down 29.96% from the same period last year. The sharp decline in the company's performance over the same period last year was mainly due to a decrease in non-operating income. In the first three quarters of 2016, the company's non-operating income reached 334 million yuan (mainly government subsidies and intangible assets disposal gains), while the company's non-operating income in the first three quarters of 2017 was only 86.97 million yuan, down 247 million yuan from the same period last year. This led to a sharp decline in the net profit belonging to listed companies, but the net profit after deduction increased by 399.17% compared with the same period last year. In the first three quarters of 2017, the company's expense rate was 4.75%, a year-on-year decrease of 2.69pct, indicating that the company's expenses were well controlled, of which the management expense rate decreased most obviously, from 4.05% to 2.47%, a decrease of 1.58pct; the sales expense rate decreased by 0.38pct, and the financial expense rate decreased by 0.73pct. Judging from the absolute value of the cost during the period, there is little change compared with the same period last year.
2. The profit of caustic soda, acrylic acid and ester business has improved, and the company's profit has increased significantly after deducting non-profit.
At present, the company's main product lines include 200000 tons of PVC paste resin, 200000 tons of caustic soda (about 80,000 tons expected), 130000 tons of acrylic acid and esters, 250000 tons of polyether polyols (Blue Star Dongda) and 60,000 tons of epoxy propane (Blue Star Dongda, currently stopped), as well as 400000 tons of ethylene, propylene, refined oil and other downstream products produced by 400000 tons of DCC plant and 500000 tons of CPP plant.
Judging from the price difference of polyether polyols, the profit has not changed much from last year. The net profit of Blue Star Dongda in 2016 is 154 million yuan, and it is expected to be about the same this year. Paste resin due to the sharp rise in the price of raw material calcium carbide, the price difference is narrowed, and the profit is expected to be mediocre. Caustic soda prices increased by 300 yuan per ton in the first three quarters of 2017 compared with the same period last year, bringing performance increments to the company. The price of acrylic acid and ester increased significantly in the first three quarters of 2017 compared with the same period last year, of which the average price of butyl acrylate reached 10038 yuan / ton, an increase of 48.69% over the same period last year.
3. Investment suggestions
It is estimated that the company's net profit for 2017-2019 is 2.27,2.63 and 299 million yuan, respectively, and the corresponding EPS is 0.28,0.32,0.37 yuan respectively. The current share price is 6.19 yuan, and the corresponding PE is 22.4,19.3 and 17.0 times, respectively.
Risk hint: calcium carbide prices remain high under the influence of environmental protection, and international oil prices have fallen sharply.
