A leader in LPG deep processing technology, low energy consumption has entered a new market. The company is a leading independent LPG deep processing enterprise in China, and many executives come from the Sinopec system. In more than ten years of technology accumulation, it has gradually established a rich downstream product matrix, making full use of the four and three carbon components of LPG for value transformation, and the utilization rate of LPG raw materials is increasing year by year. At the same time, the company continues to explore process innovation. As future butanone co-production and light hydrocarbon comprehensive utilization projects are put into operation one after another, the company will enter the new product market with advanced energy cost advantages. We expect the energy consumption cost of the company's new maleic anhydride project with an annual output of 240,000 tons to be reduced by about 450 yuan compared to the 150,000 tons of maleic anhydride project. It can also further rely on high-pressure steam, a by-product of maleic anhydride to reduce the overall energy consumption costs of various production sites, continuously improve quality and efficiency, and achieve growth.
The dual regional advantage of raw material supply and product prices. The company is located in South China. Convenient shipping and transportation and rich marine oil resources have made the South China region a treasure of three barrels of oil and foreign-invested refining and chemical industry. In the future, the South China region will also become richer in carbon four raw materials. Furthermore, since carbon-4 products produced locally in South China are relatively scarce. In particular, products that rely on interregional transportation, such as butanone and BDO, are generally expensive in South China, some of the company's new products that are about to be put into production are expected to enjoy a certain regional sales premium. Compared with the Shandong region, where LPG deep processing enterprises are concentrated, the company's new products are inherently competitive in terms of raw material supply and product prices.
I am optimistic that MTBE and alkylated oil will continue to be high. Against the backdrop of sluggish growth in refining capacity in Europe and the US and China's massive increase in ethylene production, the growth rate of gasoline production is expected to be low. Coupled with rising demand for gasoline, gasoline is expected to maintain a high level of prosperity in the next few years. With the implementation of the national VIB gasoline standard in 2023, the amount of MTBE and alkylated oil added will begin to increase, and market prices will gradually move closer to gasoline prices. However, domestic and industrial combustion account for a relatively large share of LPG consumption on the raw material side, and price fluctuations are relatively small, so the price difference between MTBE and alkylated oil has begun to widen continuously. We expect the MTBE and alkylated oil industry profits to increase further.
We forecast that the company's net profit attributable to the parent in 23-25 would be 544, 700, and 752 million yuan respectively. Each EPS share was 2.38, 3.07, and 3.30 yuan respectively. Comparable companies were given an average of 15 times PE after 23 years of adjustment, corresponding to the target price of 35.7 yuan, giving a purchase rating for the first time.
Risk warning
The progress of project construction and commissioning fell short of expectations; there was excess capacity for some new products; progress of the National Six Standard fell short of expectations; there was a risk of fluctuations in raw material prices; assuming that changes in conditions affected the calculation results; the statistics of planned projects were incomplete.