The company released an interim report, and its performance increased steadily in the first half of the year
The company issued an interim report. In the first half of 2018, the company achieved operating income of 756 million yuan, an increase of 45% over the previous year, and achieved net profit of 78,151 million yuan to shareholders of the parent company, an increase of 62% over the previous year. The company achieved net profit of 43.168 million yuan in the Q2 quarter, an increase of 46% over the previous year and an increase of 22.86% over the previous quarter. The single-quarter performance was outstanding. The main reason for the increase in the company's performance is that the company's main products, self-hardening furan resin and cold box resin, have broken through production capacity bottlenecks and increased production efficiency.
Double the production capacity of leading products and consolidate the leading position
According to the company's announcement, in January 2018, the company's fundraising project with an annual output of 75,000 tons of new chemical materials for foundry passed safety inspection (including 40,000 tons/year of self-hardening furan resin +15,000 tons/year of cold core box resin +2 million tons/year curing agent); in December 2017, the company's foundry materials project passed the safety review and will add 40 million ceramic filters for casting, 8 million thermal insulation spouts for foundry, 21,000 tons of foundry resin adhesives and curing products It can double, and the market share is expected Further improve and consolidate the leading position.
Phenolic resin project provides new growth points
According to the company's semi-annual report, the company implemented an expansion project with an annual output of 40,000 tons of special phenolic resin through its wholly-owned subsidiary Societe Generale Nantong. Among them, 20,000 tons/year of special solid phenolic resin and 20,000 tons/year of special liquid phenolic resin are expected to be completed by the end of 2018 or the beginning of 2019. Phenolic resin has low smoke and low toxicity, and the prospects are promising in the context of increasingly stringent environmental protection.
Profit forecasts and investment suggestions:
Based on the company's production capacity breaking through the bottleneck and future production expectations for the phenolic resin project, net profit for 18-20 is expected to be 1.64, 2002, and 259 million yuan respectively. Corresponding to the dynamic valuations in 18-20 were 18, 15, and 11 times respectively, covering the “buy” rating for the first time.
Risk warning
1. The risk of fluctuations in raw material prices and compression of product profits; 2. The risk of adjustment of national industrial policies and weak demand; 3. There is a risk of bad debts in accounts receivable, and repayment is poor.
