Event: the company released semi-annual report, with revenue of 658 million, year-on-year-5.92%, net profit of 111 million, + 11.08%, and non-return net profit of 105 million, + 22.38%.
Comments:
The quantity and price of disperse dyes have risen, the production capacity of intermediates has been released, and the profit margin has reached a ten-year high.
The company's Q2 operating income is-6.26% year-on-year, month-on-month + 1.45%, net profit + 10.13%, month-on-month + 38.59% Affected by the Xiangshui incident, the volume and price of disperse dyes in the company rose, while the production capacity of Yantai intermediate project continued to release, effectively reducing the company's production costs, while high value-added varieties of middle and high-end differentiated dyes were developed smoothly, and the expenses were well controlled during the period, driving the company's performance to be greatly improved and its profitability reaching new highs. Q2ROE3.93%, month-on-month + 1.07pct, a 15-year high; gross profit 41.86%, year-on-year + 11.61pct, month-on-month + 11.90pct; net profit 19.76%, year-on-year + 3.13pct, month-on-month + 5.41pct, profit margin reached a 10-year high.
Dye prices return to rationality and are expected to usher in a new round of market in the fourth quarter.
After the Xiangshui incident, the supply of m-phenylenediamine, the main intermediate of disperse dyes, shrank sharply, causing the price of disperse dyes to continue to rise. the actual transaction price of typical disperse black rose from 40 yuan / kg to 60 yuan / kg, a record high.
As the market returns to rationality, the price of dyes falls. From the perspective of historical law, the short-term sharp rise in dye prices will inevitably lead to a sharp fall, and a long-term rational and moderate rise is the most beneficial to the industrial chain. The company's existing production capacity of disperse dyes is 30000 tons, and the production capacity of 13000 tons of disperse dye intermediates in Yantai Phase I has been put into production with strong cost control. With the arrival of Jinjiu Silver Ten, the previous high-priced channel inventory has been eliminated, and the industry is expected to usher in a new round of market in the fourth quarter.
Continue to lay out big digital, build a B2C customized platform, and provide strong support for future growth.
While doing a good job in the main business of fine chemical industry, the company continues to lay out big digital and train the company to develop new engines. In recent years, by taking shares in Suzhou Ruifa Printing Technology Co., Ltd., Wuxi Desai Digital Technology Co., Ltd., Shanghai Annuoqi Digital Technology Co., Ltd., Shanghai Shanghu Digital Technology Co., Ltd., the company has initially completed the layout of the digital industry, including digital printing sprinklers and their chips, digital equipment, digital dyes, digital ink, and B2C digital printing customization platform supported by digital printing cloud factory. Cultivate the digital industry ecosystem and realize the vertical development of dye-digital dye-digital ink-digital industry chain. During the reporting period, the company has even launched digital Mini Program, and digital APP will soon be launched, both offline and online. Before the 20th anniversary of the establishment of the company in October 2019, the digital intelligent manufacturing plant will be gradually put into production, and the digital B2C customization platform will be officially put into operation.
The pattern of the dye industry has been further optimized, the big digital layout has cultivated and developed a new engine, and the "buy" rating has been maintained.
The prosperity of the dye industry has continued to improve due to environmental constraints in recent years. After the Xiangshui incident, the concentration of the industry was further increased, and the industry pattern was further optimized. The company focused on the R & D and production of middle and high-end differentiated dye products. Since listing, the compound growth rate of income has exceeded 30%, and the profit growth rate has exceeded 20%. In the first half of this year, the company deducted the growth rate of non-net profit among the highest in the industry. Based on doing a good job in the main dye industry at the same time, the company continues to layout big digital, train the company to develop a new engine, has initially formed a digital industry ecosystem, future growth is expected to provide strong support. Net profit in 1920 is expected to be 234 million $278 million, eps0.25/0.30,PE16.6/13.8, maintaining a "buy" rating.
Risk hint
Fluctuations in raw material prices, weak demand, trade frictions
