Net profit improved month-on-month in 3Q23. In the first three quarters of 2023, the company achieved operating income of 101,529 billion yuan, a year-on-year decrease of 17.67%, and net profit of 206 million yuan. Among them, 3Q23 achieved operating income of 37.213 billion yuan in a single quarter, a year-on-year decrease of 14.48%, an increase of 3.56%; net profit of 130 million yuan, an increase of 126.25% over the previous year and an increase of 215.76% over the previous year.
The price spread for aromatic hydrocarbons remained high in 3Q23, and the price spread for overseas refined oil products increased month-on-month. In the third quarter of 2023, the price spread for aromatic hydrocarbons was still high, and the price spread for overseas refined oil products improved. The price spreads for diesel and aviation coal cracking in Singapore were 28.6/25.8 US dollars/barrel, respectively, up 85%/87% from the previous month. Meanwhile, oil prices fluctuated upward in the third quarter. Brent oil prices rose from 75 US dollars/barrel to 95 US dollars/barrel, which we believe will help improve the company's gross profit. In 3Q23, the company achieved gross profit of 1,832 billion yuan, +1354% year-on-year and +102% year-on-year.
The balanced layout of the entire industry chain. As of the disclosure date of the 2023 semi-annual report, the company has a crude oil processing capacity of 8 million tons/year; participating PTA production capacity of 19 million tons/year; PIA production capacity of 300,000 tons/year; caprolactam (CPL) production capacity of 400,000 tons/year; and participating polymers with a production capacity of 11.065 million tons/year, including polyester fiber 8.365 million tons/year and bottle chips (including rPET) 2.7 million tons/year.
Key projects are progressing steadily, strengthening the integrated industrial chain. The company is steadily advancing projects such as the 14 million tons/year Brunei refining and chemical phase II project, 1.2 million tons/year “caprolactam - polyamide” integration and supporting projects, Suqian Yida 1.1 million tons/year new environmentally friendly differential chemical fiber, and Hainan Yisheng's “2.5 million tons/year PTA+1.8 million tons/year functional materials” projects to increase the company's market share in the fields of short fiber, bottle chips, etc., and give full play to the company's “polyester, nylon” and double “fiber” driving advantages to provide future performance growth. Among them, the first phase of 1.1 million tons/year of new environmentally friendly differential chemical fibers with a production capacity of 300,000 tons 2023H1 has been put into operation.
Profit forecasts and investment ratings. We expect net profit from 2023-2025 to be 330 million yuan, 940 million yuan and 1.44 billion yuan respectively, EPS of 0.09, 0.26, 0.39 yuan, and BPS of 6.97 yuan in 2023. Referring to the valuation level of comparable companies, we give PB 1.1-1.3 times in 2023, corresponding to a reasonable value range of 7.67-9.06 yuan (corresponding to 85-101 times PE in 2023), maintaining the “superior market” rating.
Risk warning: Crude oil prices fluctuate at a high level; product prices fluctuate greatly; the progress of projects under construction fell short of expectations.