Event: the company released its annual report for 2017 on March 29. The company realized operating income of 11.908 billion yuan in 2017, an increase of 34.60% over the same period last year. The net profit attributed to shareholders of the listed company was 225 million yuan, down 33.96% from the same period last year. The net profit after deduction was 79 million yuan, an increase of 90.11% over the same period last year. Of this total, Q4 realized operating income of 2.615 billion yuan, down 5.19% year-on-year and 17.54% month-on-month net profit of 48 million yuan, 45.50% year-on-year and 23.83% lower than last year.
Comments:
PVC paste resin and caustic soda gradually reached production, and the company's revenue increased significantly. In 2017, the company achieved an operating income of 11.908 billion yuan, an increase of 34.60% over the same period last year. The substantial increase in revenue was mainly due to the gradual and stable release of 200,000 tons / year of PVC paste resin and 200,000 tons / year caustic soda project production capacity. The company's revenue of chlor-alkali chemical industry in 2017 was 1.664 billion yuan, an increase of 106.6% over the same period last year. With the rise of oil prices in 2017, the price of the company's petrochemical products rose. In 2017, the company's revenue from petrochemical products reached 43.48 yuan, an increase of 31.20% over the same period last year.
The decline in non-recurring earnings and the decline in paste resin led to a decline in the company's performance. In 2017, the company realized a net profit of 225 million yuan belonging to shareholders of listed companies, down 33.96% from the same period last year, and realized a net profit of 79 million yuan after deduction, an increase of 90.11% over the same period last year. In 2017, the company's business realized a gross profit of 944 million yuan, an increase of 90 million yuan over the same period last year, mainly from chlor-alkali business. in 2017, the average price of 32% ion-exchange membrane caustic soda in Northeast China was 1161 yuan / ton, an increase of 356 yuan / ton over the same period last year. In 2017, the average price of PVC paste resin in North China was 7952 yuan / ton, slightly lower than the same period last year, but due to the rise in calcium carbide prices, the price difference between paste resin and calcium carbide decreased by 750yuan / ton compared with the same period last year, resulting in a sharp decline in the company's PVC paste resin profit.
The gross profit margin has declined, and the expense rate has dropped significantly during the company period. In 2017, the company's sales expense rate, financial expense rate and management expense rate were 1.23%, 1.20% and 2.88% respectively, down 0.23pct, 0.49pct and 0.93pct respectively compared with the same period last year, indicating that the company had better cost control in 2017. In 2017, the company's overall gross profit margin was 7.93%, down 1.72pct from the same period last year. From the business point of view, chlor-alkali business decreased 3.0pct, petrochemical business decreased 2.4pct, polyether business decreased 1.0pct, and other businesses decreased 0.9pct. The decline in the company's gross profit margin caused the company's net profit margin to be only 1.91% in 2017, down 1.88pct from the same period last year, and the net profit margin fell slightly higher than the gross profit margin, mainly due to a large reduction in non-recurrent income.
Investment advice: the company's performance from 2018 to 2020 is expected to be 203 million yuan, 219 million yuan and 229 million yuan respectively, EPS is 0.25,0.27,0.28 yuan respectively, corresponding to the current share price of 5.54 yuan, PE is 22.3,20.7 and 19.9 times, respectively, with a "neutral-A" rating.
Risk hint: calcium carbide prices remain high under the influence of environmental protection, and international oil prices have fallen sharply.