Description of the event
The company released its report for the first quarter of 2024. In 24Q1, it achieved operating income of 46.161 billion yuan, +10.07% year-on-month, and +7.84% month-on-month, and realized net profit to mother of 4.157 billion yuan, +2.57% year-on-year and +1.07% month-on-month. The month-on-month improvement in revenue and net profit due to 24Q1 was mainly due to the rise in the petrochemical business boom and the company's strong production and sales.
Incident reviews
The polyurethane basic market consolidated the upward trend in the superposition of the petrochemical business, and the 24Q1 performance was in line with expectations. In 24Q1, the company achieved polyurethane series business revenue of 17.502 billion yuan, +1.13 million tons of sales, a slight increase from month to month. The average sales price was 13,360 yuan/ton, a slight increase from month to month; it achieved revenue of 18.514 billion yuan, +6.03% month on month, and output 1.93 million tons, a slight increase from month to month. The fine chemicals and new materials business achieved revenue of 6.105 billion yuan, -2.2% month-on-month, sales of 440,000 tons, and +4.76% month-on-month. The average sales price was 13,875 yuan/ton, or -6.65% month-on-month.
The pressure on raw materials has been partially relieved, helping to improve profits. According to Baichuan Yingfu, the average price of 24Q1 Qinhuangdao thermal coal Q5500 was 914.2 yuan/ton, -5.23% month-on-month, propane was 5,159 yuan/ton, -5.87% month-on-month, butane was 5175 yuan/ton, -3.96% month-on-month, and pure benzene was 8236 yuan/ton, +9.17% month-on-month. 24Q1's gross margin was 17.63%, +0.77 pct month-on-month, up 0.1 pct year-on-year.
Investment advice
The company's revenue for 2024-2026 is estimated to be 1964.04, 2297.93, and 248.452 billion yuan, respectively, net profit to mother of 184.89, 214.61, 24.68 billion yuan, EPS of 5.89/6.84/7.86 yuan, and corresponding PE of 14.8/12.8/11.1X, respectively, maintaining a “buy-B” rating.
Risk warning
The macroeconomic recovery fell short of expectations, product prices fell, and raw material prices rose.