Main points of investment
Event: The company released the third quarterly report of 2023, realizing revenue of 101.5 billion yuan,-18% year-on-year, net profit attributable to parent of 210 million yuan,-84% year-on-year, net profit deducted from non-profit of 190 million yuan,-86% year-on-year. Among them, in the single quarter of 23Q2, the net profit of parent company was 130 million yuan, turning losses into profits year-on-year,+216% month-on-month, deducting non-net profit of 120 million yuan, turning losses into profits year-on-year,+82% month-on-month, and the performance was lower than expected.
The filament boom recovered, but the operating end was still disturbed by the Asian Games factors. 1) According to Wind statistics, during Q3, the selling prices of POY/FDY/DTY were 6817/7329/8106 yuan/ton respectively,+202/+148/+275 yuan/ton respectively, and the theoretical profit of the industry was 38/90/208 yuan/ton,+60/+20/+116 yuan/ton respectively. 2) At the same time, due to the impact of the Asian Games, some polyester plants in Xiaoshao area dropped negative during September, and the two factories of the company, namely, Yi Yi and Polymer, were affected. 3) Looking forward to the future market, filament production has come to an end. Since 24 years, the new production capacity of the industry has been significantly reduced, and the supply-demand relationship of the industry is expected to continue to repair.
Bottle and PTA pressure operation, the company's performance formed a drag. 1) According to Wind statistics, during Q3, the selling price of PTA/bottle tablets was 6014/7076 yuan/ton,+140/-158 yuan/ton respectively, and the theoretical profit of the industry was-192/-80 yuan/ton,-154/-196 yuan/ton respectively. 2) By the end of the third quarter, the PTA/bottle production capacity of the Company's participating holding companies was 1900/2.7 million tons respectively, and the bottle and PTA boom was under pressure, which dragged down the performance of the Company.
The profit performance of refined oil products is differentiated, among which the price difference of gasoline rises and falls, and the performance of diesel oil is relatively good. 1) During Q3, the cracking of refined oil products in Southeast Asia picked up as a whole, among which the cracking price difference of gasoline/diesel/aviation coal was USD 13/29/26/barrel respectively, and the month-on-month comparison was +1/+13/+12 USD/barrel respectively. 2) In terms of varieties, the gasoline price difference is greatly affected by seasonal factors. Since July, with the start of travel peak season, the gasoline price difference has continued to rise, but after entering September, the margin falls back. As of October 27, the gasoline price difference has dropped to USD 6.7/barrel, while the diesel price difference remains relatively high at USD 26/barrel.
Polyester and nylon double chains are parallel, and projects under construction are promoted in an orderly manner. 1) In terms of refining and chemical engineering, the construction of Brunei Phase II Project has obtained the preliminary approval letter from Brunei Government. 2) For polyester, Hainan Yisheng 1.8 million tons of bottle tablets and 2.5 million tons of PTA are expected to be put into production within 23 years. 3) In terms of nylon, Guangxi Hengyi 1.2 million tons of nylon integration project has been officially started in May. The project adopts the gas phase rearrangement technology independently developed by the company, which is expected to further enhance the competitiveness of the company's nylon industry chain.
Profit forecast and investment rating: Considering the marginal drop in overseas refined oil price difference, we adjusted the parent net profit of the company from 2023 to 2025 to RMB 3,900 million and RMB 1,200 million (previously RMB 1,500 million, RMB 2,200 million and RMB 2,800 million). Calculated according to the closing price on October 27, the corresponding PE is 76.9 times, 28.6 times and 21.2 times respectively, maintaining the "Buy" rating.
Risk hints: overseas economic recession, lower-than-expected production progress, raw material price fluctuations