Event: the company released the 2019 mid-term report. In the first half of the year, operating income reached 1.01 billion yuan, up 12.78 percent over the same period last year; net profit returned to the home was 114 million yuan, up 29.33 percent over the same period last year; net profit from non-return was 104 million yuan, up 34.4 percent over the same period last year; and basic earnings per share was 0.50 yuan.
Main points of investment:
The sharp rise in the price of organic pigments led to both revenue and profit growth in the first half of the year.
The company achieved double growth in revenue and net profit in the first half of the year, mainly due to the sharp increase in the price of organic pigments after the "321-Xiangshui" incident. In the first half of the year, the company sold a total of 12703.16 tons of organic pigments, a slight decline compared with the same period last year, while the average sales price increased significantly. In the first half of the year, the average sales price of organic pigments reached 57400 yuan / ton, up 13.4% from the same period last year. In addition, the decline in the prices of major raw materials in the first half of the year improved the profitability of organic pigment products, including ethyl naphthol, 2B-acid, 3pyrrolidine and 3 dichlorobenzidine.
Improve the self-sufficiency of intermediates and establish a complete self-supporting industrial chain
In recent years, environmental protection regulation has caused many upstream enterprises that do not meet the requirements of environmental protection to stop production or limit production, which directly affects the supply quantity and price. The quality and supply stability of intermediates are very important for pigment production.
In recent years, the company not only participated in the construction of intermediate production enterprises, participated in Inner Mongolia Meili Jian New Materials Co., Ltd., but also actively invested in the development of intermediates. During the reporting period, the company's intermediates 2.3 acid, DB-70, DMSS, 4-chloro-2, 5-dimethoxyaniline (4625) and chromophen series were basically self-sufficient, and a relatively complete self-supporting system of the product chain was established.
The concentration of organic pigments in China is still low, and the company still has a lot of room to improve its market share.
At present, the concentration of the domestic organic pigment industry as a whole is still not high, hundreds of organic pigment production enterprises are mostly small and medium-sized enterprises, the product homogenization is serious, the market competition is fierce. Affected by the national environmental protection policy, market environment and many other factors, the industry concentration will gradually tend to the top advantage enterprises.
Profit forecast and rating
It is estimated that the company's EPS from 2019 to 2021 is 1.09,1.31,1.55 yuan respectively, corresponding to the latest closing price PE is 19 times, 16 times, 13 times respectively, maintaining the "recommended" rating.
Risk hint. Raw material prices fluctuate sharply; backward production capacity falls short of expectations