This report is read as follows:
The company strengthens the sales of differentiated products and new products, the intermediate project reaches production and reduces the cost of raw materials, the price of dyes rises under high pressure of environmental protection policy, and the company's performance increases.
Main points of investment:
Maintain the "overweight" rating. The company strengthens the sales of differentiated products, the intermediate project reaches production and reduces the cost of raw materials, and the price of dyes rises under high pressure of environmental protection policy. The price of dyes has been maintained at 0.29 EPS for 18-20 years. 0.37max 0.41 yuan, reference to comparable companies and considering that the company's products are mainly high-end dyes, it has been given 34 times PE in 18 years, with a target price of 9.75 yuan per share, maintaining the "overweight" rating.
The performance is basically in line with expectations. The company's 18H1 realized revenue of 699 million yuan and net profit of 100 million yuan (+ 62.92%); Q2 returned net profit of 58 million yuan (+ 107.14%) in a single quarter. The decline in revenue is mainly due to the transfer of 25% stake in Qicaiyun to Ningbo Caihui company since April, excluding the impact of colorful clouds, revenue increased by 32.15% year-on-year. The substantial increase in net profit is mainly due to: (1) the dye industry is affected by environmental protection to improve the price; (2) the intermediate project reaches production, the raw material self-sufficiency rate increases and reduces the cost; (3) the digital ink business begins to make a profit.
The peak season of resuming production in Subei Chemical Park is coming, and the price of dyes is expected to rise further. Due to the impact of environmental protection, all enterprises in Guannan, Guanyun, Xiangshui and Binhai Chemical Park in northern Jiangsu have stopped production since April, affecting domestic disperse dye production capacity of about 20% and H acid production capacity of more than 30%. At present, there are no enterprises in the two irrigation Xiangshui park to resume production, the resumption progress is lower than expected superimposed dye gold nine silver ten peak season, the price is expected to further rise. In addition, the company's products are located in the high-end dye market, the differentiation rate is more than 50%, and through the sales of e-commerce platform, it forms misplaced competition with other enterprises in the industry.
The intermediate project gradually reached production, and the rate of self-sufficiency of raw materials increased to improve the profitability of the company. The company reached production in the first phase of the 30000 t / an intermediate project in Yantai, which was in the stage of trial production last year with high expenses and low income. after the project was put into production this year, the unit cost dropped sharply, and the supply of raw materials was stabilized.
Risk hint: the risk of falling product prices and the risk of loosening environmental protection policies.