Event: Zhongxin fluorine materials disclosed that the company achieved operating income of 769 million yuan in the first three quarters of 2020, an increase of 73.1% over the same period last year, and a net profit of 72.7 million yuan, an increase of 83.6% over the same period last year. The operating income of Q3 company was 305 million yuan, an increase of 89.3% over the same period last year, and the net profit was 33.91 million yuan, an increase of 139.6% over the same period last year.
Comments: 1. The performance is better than the forecast. The company's quarterly net profit in the first three years is 72.7 million yuan, which is better than the three-quarter performance forecast for 2020 disclosed in the company's semi-annual report, with an estimated net profit of 6400-70 million yuan. The company's operating income increased significantly in the first three quarters, mainly related to the merger and acquisition of Gaobao Mining since September 2019. Affected by the epidemic, the company's performance in the first quarter was slightly lower than expected, but as the domestic epidemic subsided, the company's income and profit improved quarter by quarter, with Q1-Q3 revenue of 2.00 pm 2.64 / 305 million yuan and net profit of 812max 3067 / 33.91 million yuan respectively.
two。 The company's pharmaceutical and pesticide chemical business is improving. The gross profit margin of pharmaceutical and chemical products has rebounded due to the decline in the price of raw materials and other factors. The demand for pesticide chemical products improved by the demand for related products, and the sales volume rebounded. The business of new materials and electronic chemicals has been gradually promoted, and the BPEF fund-raising project has initially contributed benefits.
3. The price of anhydrous hydrogen fluoride is low, which is a drag on the company's performance in the short term and is expected to improve gradually in the later stage. Affected by COVID-19 's epidemic situation, the demand for anhydrous hydrogen fluoride downstream industries such as refrigerants is sluggish, the price of anhydrous hydrogen fluoride is low, and the company's subsidiary Gaobao Mining Industry is affected, which is a short-term drag on the company's performance. however, considering that the fluorite-hydrogen fluoride industry chain has a strong resource attribute, with the recovery of demand, the price of anhydrous hydrogen fluoride will improve in the later stage, which is good for the company's future performance.
4. The company opens the whole industry chain of fluorite-hydrogen fluoride-fine chemicals to promote the medium-and long-term development of the company. In 2019, the company acquired Gaobao Mining, a producer of anhydrous hydrogen fluoride, and its subsidiary Gaobao Mining acquired Changxing fluorite, which successfully opened the whole industry chain of "fluorite-hydrogen fluoride-downstream fine chemicals" and successfully made up for the company's shortcomings in the upstream of fluorine chemical industry. Relying on the advantage of upstream hydrogen fluoride resources, the company has started the first phase of the construction of fluorobenzene and other series of fluoride products, with an annual output of 1200 tons of fluorobenzoic acid derivative biotechnology transformation and acetophenone by-product green deep processing project is expected to complete the equipment installation by the end of the year, to help the company's medium-and long-term development.
Earnings forecast, valuation and rating: maintain the profit forecast for 20-22 years, the net profit for 20-22 years is expected to be 1.22 trillion, and the latest equity diluted EPS is 0.60 for 0.75 PE. The current share price corresponds to 34 times of 20-year PE.
Risk tips: safe production, falling product prices, goodwill provision, COVID-19 epidemic situation, weaker downstream demand, raw material price fluctuations, environmental protection risks, M & A uncertainty risks.