Events:

According to the company's three-quarter report in 2023, in the first three quarters of 2023, the company realized operating income of 10 billion yuan, + 7.5% year-on-year, and net profit of 131 million yuan, + 316% compared with the same period last year. Q3 achieved operating income of 3.465 billion yuan in a single quarter, + 22.2% year-on-year and + 8.7% compared with the same period last year. The net profit was 167 million yuan, + 241% and + 70.1% respectively.

Comments:

The profit of clean energy products has improved, and the performance of Q3 has increased significantly: 2023Q3, the prices of ethylene, propylene and n-butanol for some of the company's clean energy products are US $812 / ton, 6861 yuan / ton and 8499 yuan / ton, respectively, compared with the same period last year. In terms of raw material and power costs, the prices of 2023Q3, anthracite and thermal coal are 1320 yuan / ton and 697 yuan / ton respectively, which are-24% and-3% respectively compared with the same period last year. 2023Q3 clean energy products increased prices, profitability significantly improved, superimposed raw material prices fell, resulting in a substantial increase in the company's Q3 performance.

With the successful signing of POE process package, the POE project is progressing steadily: on August 31, 2022, the company announced that it plans to invest in the construction of POE project. The construction scope of the project includes 2 × 100 000 t / a POE plant and auxiliary production facilities and warehouse area, with a total investment of about 4 billion yuan and a construction period of 3 years. As the core barrier of POE production lies in high carbon α-olefins and catalysts, the company plans to introduce technology companies to independently research and develop catalysts, combined with mature polybutene technology, to develop technology and transfer it to foreign countries. On August 16, 2023, Qingdao Chengzhi Huaqing Chemical New Materials Co., Ltd., a wholly owned subsidiary, signed a "Technology implementation license contract" with Zhejiang Zhiying Petrochemical Technology Co., Ltd. Zhejiang Zhiying Petrochemical Company is responsible for providing a mature 2 × 100000 t / a POE technology package. The steady progress of the company's POE project, the continuous layout of high-end chemical new materials, is expected to open up room for growth.

Sign a memorandum of cooperation on the new technology strategy and actively lay out the field of carbon neutralization: since the goal of "double carbon" was put forward, China has accelerated the establishment of a green and low-carbon circular development economic system to promote the comprehensive green transformation of economic and social development. In response to the national call and fulfilling its social responsibility, the company has made a number of innovative attempts in energy transformation and upgrading, constantly exploring the conservation and environmentally friendly reuse of traditional energy, and constructing a diversified product structure. build a new industrial blueprint for green development. On August 18, 2023, the company signed a Memorandum of understanding on Cooperation in New Technology Strategy for Green and Sustainable Development with Youopi Global Oil Technology Co., Ltd. (hereinafter referred to as "UOP"). On the premise of low-carbon development, the two sides will actively seek long-term strategic business cooperation in the field of carbon neutralization, including recycling of waste plastics to green olefins and carbon dioxide to sustainable aviation fuel (SAF). As an important member of Honeywell International Inc characteristic Materials and Technology Group, UOP has a strong talent reserve and technology accumulation in the chemical industry.

This cooperation will help the company and UOP to establish a long-term and stable strategic cooperative relationship, achieve common development, enhance the company's core competitiveness, industry influence and profitability, and promote the green and sustainable development of the company and the effective extension of the existing chemical industry chain.

Earnings forecast, valuation and rating: the company adheres to the strategy of "one body and two wings" and accelerates the laying of new production capacity. We continue to be optimistic about the future development of the company. Therefore, to maintain the company's profit forecast for 2023-2025, it is estimated that the net profit from 2023 to 2025 will be 438,000,000 yuan per share, equivalent to 0.36pm 0.40pound per share, and the "buy" rating will be maintained.

Risk tips: downstream demand is lower than expected, technology iteration risk, product prices fluctuate greatly.