Event: when the company released its quarterly report for 2020, the company realized operating income of 1.182 billion yuan, down 16.83% from the same period last year, and achieved a net profit of 243 million yuan,-28.37% compared with the same period last year. The company's performance is in line with expectations.
The epidemic affects the company's short-term performance. In the first quarter of 2020, affected by the epidemic, the company's chlor-alkali and sulfuric acid plants reduced their load, and sales of sulfonated medicines declined. The company's chlor-alkali, fatty alcohol (acid), sulfonated medicine, sulfuric acid and steam business achieved sales of 126300 tons, 59800 tons, 5800 tons, 29900 tons and 1.7877 million tons respectively, compared with the same period last year.-20.57%,-15.07%,-37.93%,-26.55% and-9.61%, respectively.
The prices of the products are mixed. In terms of price, in the first quarter of 2020, under the influence of the market, the average sales prices of chlor-alkali, fatty alcohol (acid), sulfonated medicine and sulfuric acid were 2453.80, 7455.88, 24819.90 and 526.37 yuan / ton respectively, compared with the previous year-264.53, + 257.49, + 1865.08 and-57.34 yuan / ton respectively.
In terms of raw materials, the average price of palm oil and toluene has risen, while the prices of industrial salt, sulfur and coal have declined compared with the same period last year.
During the period, the expense rate has increased, and profitability has dropped compared with the same period last year. In the first quarter of 2020, the company's period expense rate was 8.44%, an increase of 1.46pct over the same period last year. Among them, the rates of financial expenses and R & D expenses were 0.48% and 4.11% respectively, increasing 0.47pct and 0.72pct over the same period last year. The company's gross profit margin is 33.80%, lower 0.08pct than the same period last year, net profit of 20.60%, lower 3.32pct than the same period last year.
Sulfonated medicine continues to release, vinyl PVC opens the room for growth. The company plans to invest in the construction of 4000 tons / year BA project and supporting the construction of sulfur trioxide continuous sulfonation technical transformation project, in order to solve the bottleneck in the development of sulfonated medicine and improve the guarantee capacity of electronic grade sulfuric acid raw materials. The company has planned 300000 tons of VCM and 300000 tons of PVC projects, which have been listed as "key construction projects of Zhejiang Province in 2020". The project has entered the stage of on-site construction.
From 2018 to 2022, the global ethylene production capacity has been greatly expanded, and the price of crude oil at the superimposed cost end has declined. The ethylene process PVC has obvious cost advantages and strong profitability. The 300,000 t / a PVC project will greatly increase the company's performance.
Continue to generate hydrogen energy and benefit from the great development of hydrogen energy. The company continues to develop the hydrogen energy industry, using by-product hydrogen for purification, signing tripartite cooperation agreements with American Air products Company and Sanjiang Chemical to introduce advanced liquid hydrogen production technology to achieve low-cost large-scale hydrogen preparation and transportation. United Nations Rich hydrogen Energy and Shanghai Remodeling established Jiangsu Jiahua hydrogen Energy Technology Co., Ltd., which is committed to the investment, construction and operation of hydrogen filling stations in the Yangtze River Delta. The company and Zhejiang Energy Group signed the "Strategic Cooperation Framework" and "hydrogen liquid Chemical Plant Cooperation Framework Agreement", Jiahua hydrogen energy Zhangjiagang, Changshu two hydrogen filling stations have completed the preparatory work. The company has realized the layout of the whole industry chain of hydrogen production, liquid hydrogen and hydrogen refueling stations, and will fully benefit from the great development of the hydrogen energy industry.
Investment suggestion: it is estimated that the return net profit of the company from 2020 to 2022 is 1.943 billion yuan (1.943 billion yuan), the corresponding EPS is 0.87 (1.20) and 1.36 yuan, and the PE is 10-7-6. It is optimistic that the company will benefit from category expansion and production capacity, and its performance is expected to grow rapidly and maintain its "buy" rating.
Risk tips: the downstream market is not as expected, the market development is not up to expectations, and the risk of price fluctuations of major products