The company's first-half performance decreased compared with the same period last year: Hengyi Petrochemical released the 2023 mid-term report, the company realized revenue of 64.316 billion yuan, year-on-year-19.41%, and net profit of 76 million yuan,-95.8%, of which Q2 achieved revenue of 35.935 billion yuan in a single quarter,-22.8% compared with the same period last year. + 26.6%, realized net profit of 41 million yuan,-96.2% and + 18.3%. The main reason for the decline in the company's performance compared with the same period last year was the contraction in profits of oil refining products, the technical transformation of the Brunei Refining and Chemical Project in the first half of 2023, the decrease in the production and sales rate of oil refining products in the first half of the year, the contraction in the price difference of overseas oil products in the first half of the year, and the reduction in gross profit margin of oil refining products by 10.14pct compared with the same period in 22 years.
The project under construction continues to advance: the company has an annual output of 1.1 million tons of new environmental protection differential fiber project, the first phase of 300000 tons of staple fiber has been fully put into production in May 23, and the annual output of 1.2 million tons of caprolactam-polyamide industry integration and supporting projects started construction in March. Brunei Refining and Chemical Project Phase II has received a preliminary letter of approval from the Brunei government. The joint venture Hainan Yisheng annual production capacity of 2.5 million tons of PTA project and 1.8 million tons of bottle chips project is expected to be put into production by the end of 23. The completion and commissioning of the project under construction is expected to enhance the advantage of the company's integrated industrial chain and help the company's performance to thicken.
The profit of Q3 filament and product oil is expected to improve: the scene demeanor of polyester filament is expected to increase. The operating rate of polyester filament and downstream looms in Jiangsu and Zhejiang in July and August is high. On August 31, the operating rates of polyester filament and downstream looms were 85.95% and 64.60%, respectively. In terms of inventory, the inventory of filament continued to be removed in July and August. On August 31, the inventory days of POY, DTY and FDY of Zhejiang looms were 10.80,23.70,16.50days respectively; in terms of price, the average price of POY and DTY in July and August rose 41 yuan / ton and 185 yuan / ton compared with the second quarter, while the average price of FDY fell 9 yuan / ton. The price difference of oil products in Southeast Asia widened, and the average price difference of gasoline, diesel and aviation kerosene in Southeast Asia in July and August increased by 2.97 US dollars, 12.05 US dollars and 11.05 US dollars per barrel respectively compared with the average price difference in the second quarter. The company's Q3 filament and oil product profits are expected to improve month-on-month.
In the first half of the year, the prosperity of the polyester industry and the oil refining industry decreased significantly compared with the same period last year, based on which we lowered the price forecasts for polyester products, oil refining products and chemical products. We adjusted the company's earnings per share from 2023 to 2025 to 0.27,0.45,0.63 yuan respectively (the original forecast for 23-24 years 1.25,1.41 yuan). We adopt the historical valuation method, with reference to the company's average PB (TTM) of 1.6 times over the past 5 years, taking into account the bottom of the industry boom and the expected ROE level below the historical level to give a 20% discount, corresponding to the target price of 9.26 yuan, to maintain the overweight rating.
Risk hint
The price difference of refined oil is shrinking; the prosperity of polyester is reduced; the new project is not as expected; the annual output is not as expected.