This report is read as follows:
China's exports of lubricating oil additives improved month-on-month in August, and prices rose steadily. Maintain the company's profit forecast, maintain the target price at 64.5 yuan, and maintain the "overweight" rating.
Main points of investment:
Maintain the "overweight" rating. China's export of lubricating oil additives improved in August, and the EPS for 23-25 years was 2.58 RMB 3.28pm 3.95 yuan respectively. Due to the large market space of lubricating oil additives and high barriers to composite products, the company's overseas permeability has increased steadily, maintaining the target price of 64.50 yuan (corresponding to 25 times of PE in 2023).
China's export of lubricating oil additives improved month-on-month in August, in line with market expectations. According to customs data, China exported 21900 tons of lubricating oil additives in August 2023, with a month-on-month ratio of + 4.63%, with an average export price of 23239 yuan / ton and a month-on-month ratio of + 1.59%. From January to August 2023, exports totaled 144100 tons, + 26.88% year-on-year, and the average export price was 23071 yuan / ton, + 8.65% year-on-year. The overall export of China's lubricating oil additives shows a trend of rising volume and price.
The rising price of crude oil brings cost support, and the price of downstream lubricating oil starts to rise. According to Wind,23 in August, the average settlement price of Brent futures was 84.98 US dollars per barrel, with a month-on-month ratio of + 6.5%. The price of crude oil has been rising as a result of production cuts in Saudi Arabia and other countries. According to the price increase letters of various companies, in response to the increase in the cost of raw materials, large lubricating oil companies such as Great Wall, Kunlun, Shell and Shengpai have opened a trend of price increases, ranging from 5% to 8%, and the industrial chain will gradually open up.
Target overseas four, expand overseas market segments. According to Wind, Averton's parent company, Newmarket, achieved revenue of $1.388 billion in 23 years, + 0.12% year-on-year (1.338 billion yuan for the company, + 31.09% for the company), net profit of $197 million, + 56.77% for the company (250 million yuan for the company, + 71.05% for the same period last year), and gross profit margin of 28.36% (32.63% for the company).
The company is developing global market segments faster through cost advantages and cost-effective products and services.
Risk hint: market development is not as expected and raw material prices are rising.