Event: the company announced 2019 annual report, 2019 revenue of 6.912 billion yuan, year-on-year + 17.79%; return to the mother net profit of 443 million yuan, year-on-year-47.89%, deducted non-post-443 million yuan, year-on-year-33.50%, operating net cash flow 1.021 billion yuan, year-on-year-22.38%. In addition, according to the company's quarterly report in 2020, the net profit loss of 2020Q1 is 1.4-165 million yuan, mainly due to the deterioration of demand for bulk chemicals and lower prices due to the epidemic, but the steady growth of TFT liquid crystal, D-ribose and other products.
Clean energy profit decline, MTO and butadiene project production contribution income increase: due to the external economic downturn in 2019, ethylene and octanol prices fell sharply, the company's clean energy business profitability declined, Nanjing Chengzhi achieved a net profit of 651 million yuan,-31.96% compared with the same period last year. Chengzhi Yongqing 600,000 t / a MTO project and 100000 t butadiene plant were successfully put into trial operation in mid-2019, with an annual production and sales rate of 96%, contributing to revenue increment, location and volume advantages, waiting for the profit level to be repaired.
Liquid crystal material profit growth, market share increase: 2019 panel price decline, cost pressure to the upstream liquid crystal material transmission, the company through technology research and development and patent breakthroughs, established the competitiveness in the high-end market, hedging the competitive pressure of the middle and low end market, the company's 2019 TFT liquid crystal sales completion rate of 100.30% TFT domestic market share increased to 12.42%, overseas market share also increased Chengzhi Yonghua achieved a net profit of 143 million yuan, + 44.73% compared with the same period last year. In addition, the company attaches great importance to the research and development and industrialization of OLED materials, there are four kinds of OLED materials supply market.
Promote the acquisition of Yunnan Hanmai, strengthen the pattern of one body and two wings: the company completed the equity acquisition and capital increase of Chengzhi Hanmai in 2019. By the end of 2019, Yunnan HanMeng industrial hemp project is progressing smoothly, and it is planned to be put into production in 2020. After the project is put into production, it will become a large industrial hemp processing and extraction base and an industrial hemp industrial complex in the world, producing high-purity CBD crystals and broad-spectrum oil without THC, realizing cooperation with the company's existing life technology business. The company's "one body and two wings" management pattern, which is dominated by clean energy, supplemented by functional materials and life science and technology, will be further strengthened.
Profit forecast and investment rating: the global epidemic spread more than expected, the chemical industry is still facing greater pressure of destocking, and the price of crude oil at the superimposed cost side has fallen off a cliff. It is expected that the EPS will be 0.17,0.45,0.79 yuan respectively (the previous PE is 0.67,0.74,-yuan), respectively, and the corresponding share price PE will be times that of 72-28-16. The industrial marijuana project is expected to start production this year and open up the growth space of the life technology business, maintaining the "overweight" rating.
Risk tips: the risk of oil price fluctuations, rising raw material prices, the promotion of new projects is not as expected.