Main points of investment
Performance summary: in the first half of 2019, the company achieved operating income of 280 million yuan, an increase of 10.7% over the same period last year, and a net profit of 69.444 million yuan, an increase of 3.6% over the same period last year, and EPS 0.30 yuan.
Photoinitiator industry segmentation leader, with raw material advantages. The company is mainly engaged in the research, development, production and sales of photoinitiators, sulfhydryl compounds and their derivatives. The main product photoinitiator 907 has the first market share in the domestic market. The company has the strength of 907 raw material anisole sulfide large-scale production, with the production capacity of the whole industry chain from raw materials to final products, obvious advantages in cost and raw material guarantee. At present, the company has two production bases, respectively in Shangyu and Jiangxi, producing a series of photoinitiators and sulfhydryl compounds and their derivatives, with a production capacity of 2000 tons. The 29000-ton photoinitiator and pharmaceutical intermediate project in Inner Mongolia is still under construction. By the end of the first half of the year, the investment progress of the project was 69.9%.
It ran smoothly in the first half of the year. The company's main business profit increased compared with the same period last year, although the price of raw materials has risen, but the company has a higher bargaining power for some products, timely adjust sales strategy and product prices, so that the overall profit margin increases steadily. In addition, the market demand for photoinitiators, sulfhydryl compounds and their derivatives is relatively stable and maintains a good development trend.
The Inner Mongolia project is expected to be put into trial operation in the second half of the year. The company built a 29000-ton photoinitiator and pharmaceutical intermediate project in Alashan. According to the company, after the project was launched, it could be partially put into production and produce benefits in the third year, and reached the design production capacity in the fifth year. With reference to the current product market price, the average annual sales income and annual net profit can be very considerable, but also can alleviate the local employment pressure, with better economic and social benefits. It will have a far-reaching impact on the local economy and the development of the industry. at present, the project is in the installation stage of the main equipment, and trial production is expected to be carried out in October 2019.
Profit forecast and rating. According to the latest calculation of the company's total equity, it is estimated that the EPS from 2019 to 2021 will be 0.72,0.90,1.09 yuan respectively. In the next three years, the return net profit will maintain a compound growth rate of 23% and maintain the "buy" rating.
Risk tips: environmental protection risk, production safety risk, market risk, the progress of projects under construction or proposed construction, or the risk of not meeting expectations, and the risk of too much new production capacity in the industry.