Jiahua Energy released its semi-annual report for 2020. In the first half of 2020, the company realized operating income of 2.512 billion yuan, down 8.4% from the same period last year, and realized net profit of 555 million yuan, down 14.8% from the same period last year.
The decline in profits in the first half of 2020 was mainly due to a decline in operating income. According to the operating income of products The operating income of fatty alcohol (acid), sulfonated pharmaceutical products, sulfuric acid (total acid), chlor-alkali, steam, photovoltaic power generation, loading and unloading and related changes in the first half of 2020 were-1.04%,-17.91%,-35.15%,-22.07%,-5.16%, 15.93%, 1.91% to 9.46,3.38,0.29,3.58,6.21,0.23,68 million yuan, respectively. 2) the gross profit margin of fatty alcohols (acid), sulfonated pharmaceutical products, sulfuric acid (total acid), chlor-alkali, steam, photovoltaic power generation, loading and unloading and related products in the first half of 2020 changed by 1.09,-5.57, 7.08,-3.53, 6.20, 27.02, 0.42 percentage points to 19.80%, 59.30%, 47.94%, 36.64%, 37.50%,-36.78%, respectively. 81.04% 3) the rates of sales, management (including R & D) and financial expenses in the first half of 2020 were-0.05, 0.43 and-0.19 percentage points to 1.26%, 6.31% and 0.18% respectively, and the total expense rates of the three items changed by 0.19 percentage points to 7.75%.
The company is rich in production capacity, and is expected to greatly increase its revenue and profits after it is put into production. On November 13, 2018, the company announced that it intends to invest no more than 1 billion yuan to build 300,000 tons / year dichloroethane and vinyl chloride projects. The construction period of the project is two years, and it is expected that the annual income of the project will increase by 1.389 billion yuan and the annual after-tax profit will be 56 million yuan after completion. On March 20, 2019, the company announced that it intends to invest 550 million yuan in the construction of 4000 tons / year BA project and supporting the construction of sulfur trioxide continuous sulfonation technical transformation project. Including the new 4000 t / a BA pipeline continuous production plant, 10000 t / a continuous nitrification production plant, and 30,000t / a sulfur trioxide continuous sulfonation production plant, etc., the project construction period of 1.5 years, the project is expected to increase annual income of 500 million yuan, annual profit of 200 million yuan.
Attach importance to technological innovation and achieve high-quality development of the industry. In the first half of 2020, Jiahua Energy implemented 8 new R & D projects and 18 new patents (including 5 invention patents), ensuring the continuous technological upgrading and leading advantages of the core industry. The company sulfonated pharmaceutical products, and achieved large-scale continuous production, the production cost is lower than that of the same industry, greatly reduced the three waste emissions from the process source, and ensured the leading position in the industry competition.
Profit forecast and reference rating. We estimate that the EPS of the company from 2020 to 2022 will be 0.86,1.16,1.32 respectively. With reference to the valuation of comparable companies in the same industry, we think that the reasonable valuation range is 13-15 times PE in 2020, corresponding to a reasonable value range of 11.18-12.90 yuan (corresponding to PB2.11-2.44 times), which is better than that of the big city.
Risk hint. In the construction and production capacity is not as expected, aliphatic alcohol, sulfonated medicine and other product prices fluctuated sharply, raw material price fluctuations, macroeconomic decline.