Qi Xiang Tengda publishes three quarterly reports for 2020. In the first three quarters of 2020, the company achieved a total operating income of 16.333 billion yuan,-32.07% compared with the same period last year, and a net profit of 787 million yuan, + 50.28% compared with the same period last year. Among them, 2020Q3, the company achieved operating income of 6.422 billion yuan, return to the mother of the net profit of 311 million yuan, an increase of 83.39% over the same period last year, which is the highest quarterly profit since listing. We believe that the company's profit growth in the first three quarters is mainly due to the increase in gross profit margin of methyl ethyl ketone and supply chain management business.
The price of maleic anhydride rose sharply from August to September. In the third quarter of 2020, the average prices of maleic anhydride and methyl ethyl ketone were 6796 yuan / ton and 6312 yuan / ton respectively, up 6.3% and 15.1% respectively over the same period last year.
After mid-August, domestic maleic anhydride prices rose rapidly, from 5800 yuan / ton (August 14) to 9500 yuan / ton (September 18), an increase of 63.8%. As the oil price this year is much lower than the level of the same period last year, the company's raw material prices have also dropped significantly, and the company's product gross profit margin has increased when product prices are relatively stable.
Set up a subsidiary to expand the business of medical materials. On September 19, the company announced that it invested 100 million yuan to set up a subsidiary in order to make full use of the value of the company's products and improve the company's market layout, in line with the company's long-term business development plan. On the one hand, it can give full play to the company's technical advantages in R & D and production of nitrile latex and other products, on the other hand, it can further improve the profitability of the company's products.
The six major projects are making steady progress. The company's current construction projects include: 1) 200000 tons of MMA project, the first phase of the 100000-ton production line was completed and put into production in September; 2) Linzi petrochemical plant transformation project; 3) 700000 tons of PDH and 300000 tons of propylene oxide project; 4) 200000 tons of isononanol project; 5) 1 million tons of nylon 66 project; 6) 200000 tons of nitrile latex project. At present, the above projects are progressing steadily.
Convertible bonds were issued smoothly. In August 2020, the company successfully issued 2.99 billion yuan of convertible bonds, of which 2.286 billion yuan was issued to the original shareholders. The funds raised were mainly used for the 700000-ton PDH project, with a total investment of 3.46 billion yuan. The company expects the project to be put into production for 2-5 years, with an income of 4.9 billion yuan and a net profit of about 650 million yuan.
Profit forecast and investment rating. We estimate that the company's EPS in 2020-2022 will be 0.59,0.75,0.88 yuan respectively. According to the 2020 EPS and 18-22 times PE, we will give the company a reasonable value range of 10.62-12.98 yuan and a rating of "better than the market".
Risk tips: prices of raw materials and products fluctuate greatly; the progress of project construction is not as expected.