I. Overview of events
The company released its 2019 mid-year report on August 22. During the reporting period, the company realized revenue of 280 million yuan, an increase of 10.66% over the same period last year, realized net profit of 69 million yuan, up 3.60% over the same period last year, and realized net profit of 66 million yuan after deducting non-return, an increase of 8.37% over the same period last year. Basic earnings per share is 0.30 yuan, ROE (weighted) 10.09%.
II. Analysis and judgment
The profit of the main business is rising, and the industry is developing well.
The company's 2019H1 realized revenue of 280 million yuan, an increase of 10.66%, and a net profit of 69 million yuan, an increase of 3.60%. Of this total, Q2 achieved 130 million yuan in revenue and 32 million yuan in net profit in a single quarter, down slightly from the previous quarter; and the comprehensive gross profit margin was 45.46%, an increase of 1.61% over the same period last year. During the reporting period, the company's performance grew steadily, the revenue of the main products increased, and the series of photoinitiators and sulfhydryl compounds increased by 10% and 12% compared with the same period last year. Although the price of raw materials has increased slightly, the company has a higher bargaining power for some products. Through timely adjustment of sales strategy and product prices, the overall profit margin has increased steadily. In addition, the downstream application fields of the company's products continue to develop and expand, and the market demand is relatively stable, and there is still a lot of room for the next 3-5 years.
Photoinitiator subdivides the leader, the advantage of the whole industry chain is remarkable.
The company is a high-tech enterprise engaged in the research, production and marketing of photoinitiators and sulfhydryl compounds and their derivatives, with a production capacity of about 2000 tons, a total of ten categories and more than 500. it is one of the enterprises with the most complete variety of sulfhydryl compounds in China, and its market share is relatively stable. Photoinitiator series mainly includes 907,369,184,184, ITX, BMS and other products, of which 907,ITX, BMS and other products from the production of basic raw materials to the sale of finished products, the whole process of independent control, with the advantage of the whole industry chain. In the first half of the year, on the one hand, the company optimizes the product process to reduce the production of "three wastes" from the source and increase the output rate; on the other hand, it upgrades products according to customer needs, seizes the high-end application market, and improves the added value and irreplaceability of the products. stabilize the industry position.
The orderly progress of new projects will lay a foundation for high growth in the future.
The first phase of Inner Mongolia investment project "29000 tons / year photoinitiators and pharmaceutical intermediates" is photoinitiators and upstream raw materials with a production capacity of 11,000 tons per year (TPO, 184,1173, etc.), and pharmaceutical intermediates and sulfhydryl compounds have a production capacity of 18,000 tons per year. The aim is to make full use of existing resources, improve the company's product categories in the field of photoinitiators and pharmaceutical intermediates, expand the production scale of key products, and improve the industrial chain. 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. In addition, the R & D building with a floor area of 8400 square meters in the technology R & D center project is in the stage of completion and acceptance, and related instruments are being procured and relevant work is expected to be fully carried out by the end of 2019.
III. Investment suggestions
It is estimated that the EPS of the company from 2019 to 2021 is 0.64,1.05,1.25 yuan, and the corresponding PE is 20 times, 12 times and 10 times respectively. Refer to the current average of 23 times the PE level of the other chemicals section of SW, covering it for the first time and giving it a "recommended" rating.
Fourth, risk tips:
Downstream demand is lower than expected; raw material prices fluctuate sharply; project production is not as expected.
