Event: the company issued a revised 17-year performance forecast on the 16th, with an estimated full-year net profit of 280,340 million yuan, an increase of 14.1% to 38.55% over the same period last year. The main reason for the amendment is that the wholly-owned subsidiary Nengte Technology VE basically reached production in the fourth quarter and the sales price increased significantly.
VE price is strong, later pay attention to the progress of BASF's resumption of production: according to Boya Hexun price monitoring, 16 VE (50%, domestic) quoted price of 107.5 yuan / kg, up 168.8% from June last year. Since BASF announced in November last year that vitamin An and E had stopped production due to force majeure, VE prices soared rapidly and remained firm. BASF expects to resume production around April this year, and will continue to pay attention to the impact of resumption progress on the supply side in the later stage.
Innovative process, VE project has raw materials and cost advantages: the company adopts a new synthesis route to produce trimethylhydroquinone, the key intermediate of VE, using p-xylene as raw material. Break the domestic limit that m-cresol and trimethylhydroquinone are controlled and the supply is scarce; moreover, the raw material xylene of the new process is cheap and sufficient, and the company has a great cost advantage. The company announced that its subsidiary Nengte Technology VE has a production capacity of 20, 000 tons (corresponding to 40, 000 tons of VE powder), accounting for about 17% of the global production capacity. According to the company's production capacity of 40,000 tons of VE powder and 15% income tax of Nengte Technology, every 10 yuan / kg increase in VE powder price will bring the company an annualized profit elasticity of about 290 million yuan.
Layout vertical e-commerce, consolidate sales network: subsidiary plastic rice information is an electronic platform for commodity trading based on plastic raw materials, by providing customers with online procurement, finance, offline warehousing logistics and other services, it has developed into one of the most influential supply chain e-commerce platforms in China's plastics industry. The huge sales network of plastic rice information is expected to solve the deficiency of the company's sales link and form a synergy effect in the business. At the same time, the rich profits of plastic rice information provide a new profit growth point for the company. The performance commitment of plastic rice city in 1719 is 15,225 and 300 million yuan.
Investment suggestion: raise the profit forecast, the company's EPS for 17-19 years is expected to be 0.12,0.29,0.31 yuan respectively; maintain the investment rating of holding-A, and the target price for 6 months is 6.15 yuan.
Risk tips: VE downstream demand slowdown, plastic rice city performance is not as expected, and so on.