In the first three quarters, the year-on-year net profit of + 57%, Q3-46% / month-on-month-61%, maintained the "increase" rating company released three-quarter report on October 25, achieving revenue of 1.9 billion yuan, year-on-year-11%, return-to-mother net profit of 130 million yuan, year-on-year + 57% earnings Q3 revenue of 790 million yuan, year-on-year-20%, return-to-mother net profit of 22 million yuan, year-on-year-46% / month-on-month ratio-61%. Considering that the consumption tax policy affects the profitability of white oil / heavy aromatics products, we adjust the product gross profit margin and other assumptions, and adjust the 23-25 return net profit of the company to RMB 1.85 million 2.72 trillion (the previous value is RMB 2.46 million), corresponding to EPS0.75/1.11/1.56 yuan, combined with the comparable company's 24-year Wind consensus average 11xPE, give the company 24-year 11xPE, the target price is 12.21 yuan. Maintain the "overweight" rating.

The profit of the main products is affected by the consumption tax policy, and Q3 gross profit margin is under pressure compared with the previous month. According to Longzhong information, the average price of 23Q3 white oil and heavy aromatics is 0.877 million yuan per ton, which is 5% more than the same period last year, and 8% from the previous year. Due to the influence of the consumption tax policy and the upward price of crude oil, the price of the company's products has increased month on month, but as the amount of consumption tax levied is higher than the range of product price increases, the downstream demand is weak and other factors. The company's Q3 profits are under pressure. Q3 single-quarter gross margin yoy-1.6/qoq-10.1pct to 8.6%.

Product demand is expected to gradually improve, actively adjust the business structure to reduce the impact of consumption tax policy, according to Longzhong information, October 25 heavy aromatic hydrocarbons / white oil price 0.90 yuan / ton, although the price center has moved up since the consumption tax was levied in June, but in terms of the stage, the overall increase in product prices is still lower than the amount of consumption tax levied, but according to the company's three-quarter report, the company optimizes product structure and increases added value. And extend the industrial chain and other ways to continue to reduce the impact of consumption tax, while with the future recovery of demand in areas such as daily chemical / chemical fiber / modified plastics, the company's profits are expected to return to the growth track. The project of 100000 t / a food grade / cosmetic grade white oil and 80,000 t / a light white oil is progressing steadily, and the added value of the products continues to increase in the future. At the end of Q3, the company is under construction of 80 million yuan, which is + 55 million yuan than at the beginning of the year.

Risk hints: raw material price fluctuation risk; consumption tax policy change risk; new project progress is not as expected risk.