Performance
According to the company's quarterly report, the company's operating income in the first quarter was 1.182 billion yuan, down 16.83 percent from the same period last year, and its net profit was 243 million yuan, down 28.37 percent from the same period last year.
Analysis.
The epidemic affects the sales of acid-base products, and the short-term reduction of start-up affects the profitability of the products. Affected by the epidemic in the first quarter, the resumption of work by downstream enterprises was delayed, the company's acid-base continuous production, the starting load was reduced, the sales of chlor-alkali and sulfuric acid were down 21% and 27% compared with the same period last year, and the product revenue decreased by 27% and 34% respectively. Due to the short-term restrictions of regional logistics and transportation, the sales and transportation of the company's sulfonated pharmaceutical products was blocked, and the products started at full load, but the sales were 38% lower than the same period last year. Led to a decline in overall revenue. After March, the domestic production compound has gradually improved, and the start-up of the park and surrounding enterprises has gradually improved, leading the company's various businesses to gradually return to normal production, and the impact of the epidemic on the company is expected to gradually weaken.
The regional layout overlays the integrated development of the park, providing the company with a relatively sound foundation for development. The company is based on thermoelectricity, acid and alkali extends to oil chemical industry, sulfonated medicine and other diversified fields, forming the industrial chain layout of the company's circular integration. on the basis of its own product sales layout, the company provides diversified product supply for surrounding enterprises. it has natural geographical advantages and industrial chain advantages. During the epidemic in the first quarter, although the domestic construction delay affected downstream demand, the company was still able to ensure that the overall gross profit margin was 33.8%, which was the same as the same period last year, and built a sound foundation for the company's development by virtue of the good industrial chain and surrounding sales network layout.
The new project will continue to advance, improve the existing layout, and promote the long-term development of the company. The company is building 300,000 tons / year dichloroethane and vinyl chloride projects and 300,000 tons / year functional polymer material projects to consume by-product chlorine and improve the layout of the industrial chain; 30,000 tons of sulfonation capacity expansion and 4000 tons / year BA projects to strengthen the sulfonation field leadership and development space; coordination of industrial resources, the use of low-cost by-product hydrogen and its own geographical advantages, the layout of hydrogen energy business, to achieve the expansion and development of new fields. Continue to promote the three directions, strengthen the existing production line on the basis of driving the company's long-term development.
Investment suggestion
Relying on thermoelectric and acid-alkali production lines for many years, the company has continuously expanded its business to form a circular industrial chain layout. The layout of new PVC projects, sulfonated pharmaceutical projects and hydrogen energy business will continue to support the steady development of the company. Considering the impact of the epidemic on terminal demand, it is predicted that the company's net profit from 2020 to 2022 will be 12.19,16.27 and 1.792 billion yuan respectively. The corresponding PE is 10.3,7.7,7.0 times respectively, maintaining the "overweight" rating.
Risk hint
The risk of new projects falling short of expectations; the risk of slowing down the growth rate of sulfonated medicine demand; the policy risk related to hydrogen energy; and the risk that the epidemic at home and abroad affects downstream demand and makes product prices fluctuate sharply.