Q2 performance increased slightly compared with the previous month. In 23 years, H1 achieved revenue of 2.956 billion yuan, a decrease of 0.52% over the same period last year, and a net profit of 217 million yuan, an increase of 3.54% over the same period last year. In 23 years, the company's Q2 achieved revenue of 1.477 billion yuan, year-on-year-9.18%, month-on-month ratio-0.16%, net profit of 110 million yuan, year-on-year-15.68%, month-on-month growth of + 2.95% Q2 performance compared with the previous year, mainly due to profit growth brought about by the expansion of the price difference of the main oil adjustment components.

The price difference between the two major oil transfer components continues to expand, and the maintenance items suppress the overall profits. In the first half of this year, there was a sharp increase in domestic travel demand. The six-B gasoline standard of the superimposed country officially landed. The prices of the two main high-octane blending products of the company remained high, while the price of raw material LPG fell due to the influence of crude oil, and the price gap of Q2 products continued to expand. However, in order to cooperate with the maintenance of upstream raw material suppliers, the company Q2 shut down the production and maintenance of 300,000 t / an isooctane plant and 150,000 t / a maleic anhydride plant for 33 and 13 days respectively, so the overall profit growth of Q2 is limited.

The long-term impact of consumption tax policy is limited. On June 30 this year, isooctane was officially included in the scope of consumption tax, resulting in a reduction in demand for informal oil transfer downstream in the short term, resulting in a decline in product tax deduction prices, but we believe that its impact on the company's long-term earnings is limited. In the long run, the affected demand can be digested by the demand for regular oil regulation, and the tax deduction price is still expected to return to the original level, especially under the promotion of the national six B gasoline standard, the proportion of isooctane is increased and the demand for formal oil regulation is growing. it is expected to help the tax deduction price to rise. In addition, the demand and prices of related alternative components are also likely to rise in the short term, such as MTEB, which does not involve a consumption tax, thereby stabilizing short-term profit fluctuations.

The new project is progressing steadily, waiting for the new product to be released. During the reporting period, the company's 60,000 tons / year full biodegradable plastic PBAT project produced qualified products, the sec-butyl acetate plant resumed production smoothly, and the downstream project with an annual production capacity of 100,000 tons of butanone and co-production of 130000 tons of ethyl acetate also entered the stage of trial production and commissioning. The full construction of the 500t / year catalyst project and the annual production of 120000 tons of 1,4-butanediol project, and the first phase of light hydrocarbon comprehensive utilization project was promoted in an orderly manner. The continuous landing of new projects will bring new profit growth points for the company.

We appropriately adjust the company's profit forecast according to the recent product and raw material prices, and forecast that the 23-25 year return net profit of the company is 5.39,6.93 and 754 million respectively (the original 23-25 year is 5.44,7.00,752 million), and the EPS per share is 1.69,2.17,2.36 yuan respectively. The comparable company is given an average of 17 times PE after 23 years adjustment, corresponding to the target price of 28.73 yuan, maintaining the buy rating.

Risk tips: project construction and production progress is not as expected; overcapacity of some new products; the promotion of the sixth standard is not as expected; the risk of raw material price fluctuations; changes in consumption tax policy.