Event
The company released its 2019 semi-annual report. During the reporting period, the company achieved revenue of 170 million yuan, an increase of 7.64% over the same period last year, and a net profit of 34 million yuan, an increase of 58.47% over the same period last year. Of this total, Q2 achieved a net profit of 18 million yuan in a single quarter, an increase of 67.87% over the same period last year.
Brief comment
The leader of the foaming agent, benefiting from the falling prices of petrochemical products and silicone raw materials, the company's main products are polyurethane hard foam homogenizer and soft foam homogenizer, which contribute about 80% and 20% to the company's revenue respectively. Foaming agent is a necessary additive for the production of polyurethane rigid / soft foam plastics, which plays the role of emulsifying foam materials and stabilizing foams. its downstream application is the same as polyurethane plastics, such as cold storage and heat preservation, furniture, automobile, building energy saving and other traditional industries. at the same time, it also began to gradually explore its application in military and other fields. The company occupies a leading position in this subdivision field, in which the annual production and sales of hard foam homogenizer is about 10,000 tons, with a market share of about 15%, making it the largest manufacturer in China.
2019H1, the company's sales of hard foam and soft foam homogenizer were 5296 and 1022 tons respectively, an increase of 7% and 6% respectively over the same period last year; and the prices of hard foam and soft foam homogenizer were 2.57,1% and 29600 yuan / ton respectively, up 3% and 1% respectively over the same period last year. Both volume and price have risen slightly. The biggest contribution to the company's performance is the sharp decline in the price of petrochemical raw materials and silicone raw materials, among which, according to the company, the price of dipropylene glycol has dropped by 32% compared with the same period last year, and the prices of silicone D4, MM and high-hydrogen silicone oil have dropped by 39%, 39% and 30%, respectively.
The pattern of the foaming agent industry is stable, and the company's main business momentum is good.
The company's main hard foam homogenizer products have high technical barriers, and the global production capacity, except for Mercedes, is mainly concentrated in a small number of overseas giants, including Germany Yingchuang, American Maitu, American Air Chemical and so on. The company's hard foam homogenizer series products break the monopoly of multinational enterprises on the domestic market, and become the mainstream products in the hard foam homogenizer market by virtue of outstanding performance-to-price ratio and high-quality technical service advantages. supply BASF, Dow, Red Polaroid and other well-known chemical enterprises at home and abroad. On the whole, the supply of foaming agent industry is relatively stable, and the downstream demand for polyurethane plastics maintains a certain growth, and the overall industry pattern is good.
At present, the company has gained a firm foothold in the domestic and international foaming agent market. at the same time, the new generation polyurethane foam stabilizer project of 6000 tons / year in Nanjing Jiangbei New area is planned for 19H2 acceptance, replacing 5000 tons / year production capacity of Nanjing Economic Development Zone. After completion, it will add 1000 tons / year to the company's production capacity, and at the same time, it will also play a role in optimizing the company's product structure.
The supply and demand of organosilicon industry chain is reversed, and the logic at the cost end can be maintained.
At the beginning of 18H2, the prices of organosilicon upstream and downstream products fell rapidly, resulting in a sharp drop in the price of a variety of raw materials, which is good for the company's performance. At present, Xin'an shares, Hesheng Silicon Industry, Dongyue Group and Xingfa Group all have large-scale silicone expansion plans in 19-21, which poses continuous pressure on the silicone industry chain, and it is difficult for silicone prices to improve too much in the short to medium term. At the same time, combined with global supply and demand and geopolitical factors, we judge that the international crude oil price center is expected to remain in the range of 60-70 US dollars per barrel. Overall, the cost-side logic that underpins the company's performance is expected to be maintained.
Investment suggestion
It is estimated that the net profit attributed to the parent company from 2019 to 2021 is 71 million, 8100 and 91 million yuan. The corresponding PE is 24X, 21X and 18X, covering for the first time and giving an overweight rating.
