I. Overview of events
On April 29, 2020, the company released a report for the first quarter of 2020, in which operating income reached 287 million yuan during the reporting period, down 34.53% from the same period last year. Net profit belonging to shareholders of listed companies was 10.9076 million yuan, down 41.87% from the same period last year.
II. Analysis and judgment
The performance was affected by the epidemic, and the gross profit margin rebounded from the same period last year.
The company's performance declined in the first quarter compared with the same period last year, mainly due to the impact of the COVID-19 epidemic. Affected by the epidemic and the collapse in oil prices, the prices of PTA and NPG, the main raw materials of polyester resin, fell sharply. The average price of PTA in the first quarter was 4277 yuan / ton, down 33.6% from the same period last year. The average price of PTA was 8478 yuan / ton, down 17.9% from the same period last year. The sharp drop in raw material prices widened the polyester price gap, raising the company's gross profit margin to 19.97% in the first quarter, compared with 17.42% in the same period last year. In the medium term, PTA market supply is adequate, NPG new capacity put into operation to achieve self-supply, we judge that polyester profits ushered in a rise.
Promote the upstream NPG layout and improve the integration of the industrial chain
The company's Maanshan Magic Sword 40,000 ton NPG project is expected to be put into production this year, together with the company's original joint venture Lihua Yishenjian 30,000 ton NPG project, totaling 70,000 tons. The company has an annual production capacity of 200000 tons of polyester resin, according to 1 ton of polyester resin consumption of 200000 tons of NPG estimated, in the case of full production, need to consume about 80,000 tons of NPG, the company's self-produced NPG can basically meet its own production needs. The commissioning of the new 40,000 ton NPG project will help to enhance the degree of integration of the company, stabilize the price of raw materials and increase the company's cost advantage.
Powder coating leads to the growth of polyester demand, and the company is expected to fully benefit
Powder coating is the direct downstream of polyester resin. in recent years, the rapid development of powder coating market has led to the growth of the demand for polyester resin. in recent years, the average annual growth rate of polyester sales is more than 10%. The company is the leader in the domestic polyester resin industry for powder coatings, with an annual production capacity of 200000 tons of all kinds of polyester resin, with a market share of more than 20%. The company is expected to benefit from the growth of polyester resin demand.
III. Investment suggestions
As the leader of the polyester resin industry for powder coatings, the company will fully benefit from the rapid development of the industry dividend. The new project will improve the degree of integration of the company's industrial chain and improve the cost advantage of the main business. We estimate that the EPS of the company from 2020 to 2022 will be 0.16 yuan 0.18,0.29 yuan respectively, the corresponding share price PE is 27.0,24.5 and 14.8 times, the company PB (MRQ) is 2.03 times, and the industry median value is 2.39 times, maintaining the "recommended" rating.
Fourth, risk tips:
Product prices have declined, raw material prices have risen sharply, and the progress of new projects has fallen short of expectations.
