Events:
The company released its annual report for 2017, with operating income of 2.935 billion yuan, an increase of 63.33% over the same period last year, a net profit of 162 million yuan, an increase of 73.24% over the same period last year, and basic earnings per share of 0.11 yuan, an increase of 57.14% over the same period last year.
Comments:
1. The prices of the main products are up, and the profitability continues to improve.
In 2017, the coal industry continued to pick up, and remarkable results were achieved in resolving excess capacity. The price of coke continued to rise, reaching 2266.25 yuan / ton in December and more than 1500 yuan / ton in the whole year. The prices of by-products such as methanol, crude benzene and coal tar also rose significantly, and the company's profitability increased significantly. During the reporting period, the company sold 1.32 million tons of coke, 16700 tons of crude benzene, 25600 tons of refined washing oil and 102800 tons of methanol, which were significantly higher than last year.
2. The advantage of resources is obvious, and the industrial chain of circular economy is highly competitive.
The company's business mainly includes coal coke, new coal chemical industry and new materials, thermal power, to create a circular economy industrial chain covering "coal, electricity, chemical, oil, wood". Qitaihe is the most important main coking coal production area in Northeast China and the largest anthracite production base in Heilongjiang, with a coal reserve of 1.8 billion tons and prospective reserves of 4.2 billion tons. The raw coal has the characteristics of "three low and two high" and is rich in graphite deposits. The company has Milin graphite mine, which has 5.54 million tons of crystalline graphite minerals.
In accordance with the principle of "reduction, reuse and resource utilization", the company strives to extend "interlinked and industry-to-industry".
The industrial chain of circular economy, to create an industrial cluster with comprehensive utilization of resources, "squeezing clean" and complete chain.
A circular economy industrial chain of "coal coke, coke gas, methanol synthesis, stable light hydrocarbon synthesis, coking waste heat power generation, coking by-product coal tar deep processing, power plant residual steam heating" has been formed, which maximizes the utilization of coal resources and achieves good economic and social benefits.
3. The new coal chemical industry business is worth looking forward to. The 300,000 t / a stable light hydrocarbon project is expected to be put into production in October, relying on the advantages of local resources, vigorously extending the coking industry chain, developing a new coal chemical industry, and realizing the high value of the products. the product is positioned as a high-end new material. The company's 50,000 tons / year needle coke project and 100 tons / year chemical graphene project entered the production stage at the end of last year, and 20,000 tons / year mesophase carbon microsphere project and 50 tons / year physical method graphene project are under construction; 300,000 tons / year stable light hydrocarbon project is expected to be completed and put into commissioning in October this year.
The company's 300000 ton stable light hydrocarbon project uses the existing excess coking capacity to change metallurgical coke into chemical coke, use chemical coke to make gas, synthesize methanol, and produce stable light hydrocarbons. The stable light hydrocarbon products can be used not only as additives for high clean gasoline, but also as chemical raw materials. The implementation of this project can not only upgrade the company from traditional coal chemical industry to modern coal-based clean energy industry, but also lead the coking industry to get rid of its dependence on the iron and steel industry and further enhance the core competitiveness of enterprises.
4. Investment suggestions
We estimate that the company's net profits belonging to shareholders of listed companies from 2018 to 2020 are 216 million yuan, 280 million yuan and 312 million yuan respectively, corresponding to EPS 0.13,0.17,0.19 yuan respectively; corresponding to the current share price of 7.21 yuan, PE is 54,42 and 37 times respectively, maintaining the "prudent recommendation" rating.
Risk tips: energy prices, chemical products down risk, new materials business progress is not as expected risk.