occurrences
The company released its 2018 mid-year report. During the reporting period, it announced that it achieved revenue of 736 million yuan, an increase of 45.5% over the previous year, and achieved net profit of 78 million yuan to the mother, an increase of 61.6% over the same period last year, and EPS of 0.39 yuan, an increase of 62.50% over the same period last year. Among them, Q1 and Q2 achieved revenue of 374 million and 382 million yuan respectively, Q2 increased 30.7% year-on-year, and achieved net profit of 0.35 and 43 million yuan respectively, and Q2 increased 43.3% year on year.
Brief review
Leading casting materials, H1's performance increased steadily in 2018. The company is the only listed company in the casting molding materials segment. Self-hardening furan resin and cold core box resin ranked second and first in domestic market shares respectively. During the reporting period, Guimu's net profit growth rate reached 61.6%, and resin sales grew 17-18% over the same period last year, contributing to the main performance.
Prices of raw materials such as furfuraldehyde and MDI fell during the same period, which prompted the company's profit margin to improve.
Prices of raw materials are relatively stable, and rising demand in the downstream market continues to drive future performance. During the reporting period, the price of furan resin was 15,000 yuan/ton, and the price of furfuryl alcohol was 12,000-13,000/ton.
The total production of various types of castings in China reached 49.4 million tons in 2017, an increase of 4.7% over the previous year, and an increase of 1.2% over 2016, driving an increase in the market share of resin adhesives. Raw material prices are expected to fluctuate within a reasonable range in the second half of the year. Influenced by the policy, the increase in infrastructure projects will also drive casting production, and the company will continue to profit as an industry leader.
The production capacity of the main business doubled to break the bottleneck, and the phenolic resin project progressed steadily. In 2018, 75,000 tons of new construction projects were put into operation, doubling production capacity and breaking the bottleneck of bankruptcy. During the reporting period, the company's production was mainly based on the production capacity of new projects, with 66,000 tons of original production capacity supplemented by old production capacity. The new project process was advanced, and product quality stability and production efficiency were further improved. In addition, the company's annual production of 20,000 tons of special solid phenolic resin and 20,000 tons of special liquid phenolic resin projects will gradually contribute to performance and serve the mid-range market. It is expected to increase the company's performance by 5-6 billion yuan and profit by 0.4 to 60 million yuan.
Profit forecast: The company's net profit for 2018, 2019 and 2020 was $0.17, 0.22 and $29 million, EPS of $0.83, 1.09 and 1.44 yuan, and PE 17X, 13X and 10 times. Optimistic about the company's performance in the second half of the year, I will continue to recommend it!