Events:
According to the three-quarter report of 2020, the company achieved a total operating income of 874 million yuan in the first three quarters, down 3.11% from the same period last year, and realized a net profit of 60.4524 million yuan, an increase of 4.71% over the same period last year. For a single quarter, the company's Q3 realized operating income of 351 million yuan, an increase of 19.91% over the same period last year. The net profit of returning to the mother was 29.1869 million yuan, an increase of 115.51% over the same period last year. The company's third-quarter results exceeded expectations.
Comments:
The profit level has improved, and the company's performance has increased significantly in the third quarter. Benefiting from the commissioning of the company's 20,000 tons of new MBS production capacity, the company's Q3 realized operating income of 351 million yuan, an increase of 19.91% over the same period last year. The operating cost of the company's Q3 was 261 million yuan, an increase of 13.82% over the same period last year. Affected by the decline in oil prices and other factors, the company's cost growth in the third quarter was lower than the revenue growth, the profit level increased, and the profit performance of Q3 increased significantly compared with the same period last year.
The company's Q3 net profit was 29.1869 million yuan, an increase of 15.6434 million yuan, or 115.51%, over the same period last year.
PVC auxiliaries industry leader, production capacity growth to help continue to improve performance. Benefiting from the growth of demand for plastic products, the reduction of raw material costs and the development of PVC flooring industry, the company's main products ACR, MBS market continues to grow. The company is a leader in the domestic PVC auxiliary industry, ACR production capacity ranks in the forefront of the domestic, MBS production capacity of the first in the country. By June 2020, the company's 20, 000-ton MBS impact modifier project has been completed and solidified. The company currently has 40,000 tons of PVC additive project under construction, and plans to put into production in the second half of 2020, and another 20,000 tons of MBS project is scheduled to start construction in the second half of the year. By the end of the reporting period, the company has a production capacity of 140000 tons of PVC auxiliaries and plans to build 60, 000 tons of PVC auxiliaries. The release of new capacity in the future is expected to promote the company's continued growth.
With the rapid development of degradable plastics, the company's 60,000-ton PBAT production line will become a new performance growth point. According to estimates, after the implementation of the plastic restriction and ban policy issued by the National Development and Reform Commission and the Ministry of Ecological Environment in January 2020, the demand for biodegradable plastics in the three areas of takeout, express delivery and agricultural film will reach 1.5453 million tons in the future, with the corresponding market of about 27 billion yuan. As one of the most potential degradable plastic products, PBAT has a lot of room for growth in the future. The company laid out the PBAT industrial line ahead of time, and the PBAT project with an annual output of 60,000 tons has completed the EIA procedures and is scheduled to be completed before June 30, 2021. The company's PBAT project technology is provided by Shanghai Juyou Chemical Industry, with proprietary technology and equipment with independent intellectual property rights, and has built a continuous production line of tens of thousands of tons in China. After all the projects have reached production and effectiveness, it is expected to bring nearly 1.152 billion revenue and 107 million yuan in net profit to the company, which will become a new performance growth point for the company.
Investment advice: taking into account factors such as strong demand support in the downstream market, and lower oil prices compared with the same period last year, we slightly raised the company's 20-22 net profit from 0.84 shock 157pm 291 million to 0.88 PE 299 million, corresponding to 33,18,10 times PE respectively, maintaining "buy".
Rating.
Risk tips: the risk of large fluctuations in oil prices, the company's new production capacity is less than expected risk, degradable plastic policy landing is not as expected risk, and so on.