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东方盛虹(000301):24年Q1业绩环比修复 随需求回升盈利有望进一步边际改善

Dongfang Shenghong (000301): Q1 performance was repaired month-on-month in '24, and profits are expected to improve further marginally as demand rebounds

中信建投證券 ·  May 11

Core views

In 2024, Q1 achieved revenue of 36.739 billion yuan, +24.3% year over year; realized net profit of 247 million yuan, -66.5% year over year; realized net profit of 86 million yuan after deduction, -87.6% year on year. In '23, we achieved revenue of 140,440 billion yuan, +119.9% YoY; realized net profit of 717 million yuan, +17.3% YoY; realized net profit of 217 million yuan after deduction, +155.2% YoY. Within 23 years, the company's PETG and MMA projects were put into operation one after another, gradually forming a “1+N” industrial layout extending to diversified industrial chains such as new energy, new materials, electronic chemistry, and biotechnology.

occurrences

The company released its report for the first quarter of 2024: in Q1, the company achieved revenue of 5.672 billion yuan, a year-on-year decrease of 11.33%; realized net profit of 475 million yuan, an increase of 5.96% over the previous year; and realized net profit of 400 million yuan after deduction, an increase of 23.35% over the previous year.

Brief review

Profit was under pressure in Q4 '23, and Q1 performance improved month-on-month in '24

In 2024, Q1 achieved revenue of 36.739 billion yuan, +24.3% year over year; net profit to mother was 247 million yuan, -66.5% year over year; net profit after deduction was 86 million yuan, -87.6% year on year, turning a loss from month to month. In Q1 2014, the company calculated $515 million in asset impairment provisions, of which inventory depreciation preparations reached 504 million yuan.

In 2023, the company achieved revenue of 140,440 billion yuan, +119.9% YoY; net profit to mother of 717 million yuan, +17.3% YoY; Q4 achieved net profit to mother of 1,762 million yuan in a single quarter; net profit after deduction of 217 million yuan, +155.2% year-on-year, including 2.2 billion yuan in asset impairment losses for the whole year.

Looking at subsidiary companies: In '23, Shenghong Refining & Chemical achieved net profit of 480 million yuan, mainly due to the gradual release of performance after commissioning; Silbon Petrochemical achieved net profit of 750 million yuan, which was mainly dragged down by the drop in EVA product prices; Honggang Petrochemical achieved net profit of 200 million yuan, -310 million yuan; and Shenghong Chemical achieved net profit of 110 million yuan, achieving sales of 2.74 million tons of chemical fiber products throughout the year.

The production capacity of the new project was gradually released, and 1+N integrated collaboration was further improved. Within 2023, the company carried out scientific and technological research in key fields such as high-end polyolefin materials, fine chemicals, and new energy materials, and achieved technical breakthroughs. The fourth acrylonitrile plant was put into operation, and the total production capacity rose to 1.04 million tons/year, ranking first in the world. The self-developed POE pilot test was successful, and the 100,000 tons/year industrialization plant construction work is being implemented; technical advantages have led the million-ton EVA project to continue to develop, making continuous progress towards the goal of “building the world's largest photovoltaic film production base”. High-end new material projects such as 250,000 tons/year recycled polyester fiber, 130,000 tons/year PETG, and 90,000 tons/year MMA have been put into operation one after another. The main raw materials have achieved basic self-supply, and the advantages of upstream and downstream integration are remarkable. In March 2024, the company successfully put into operation the 100,000 tons/year vinyl carbonate and dimethyl carbonate (EC/DMC) plant. The downstream product will be mainly used in the field of lithium battery electrolytes.

Pay attention to shareholder returns and maintain a high dividend ratio

In 2023, the company plans to distribute a cash dividend of 0.1 yuan per share to all shareholders, for a total cash dividend of 661 million yuan, with a cash dividend ratio of 92.2%.

Since the company went public 6 years ago, the cumulative dividend ratio has exceeded 40%, which is at the leading level in the industry. Furthermore, since 2022, the company has continuously launched four batches of employee stock ownership plans, with a total investment of 10 billion yuan. As of February 2024, the purchase of the latest employee stock ownership plan has also been completed, demonstrating confidence in the company's long-term development.

Profit forecast and valuation: The company's net profit for 2024, 2025, and 2026 is estimated to be 46.3/65.3/7.50 billion yuan, and EPS is 0.7 yuan, 1.0 yuan, and 1.1 yuan respectively; the corresponding PE is 14.3X, 10.2X and 8.8X, respectively.

Risk warning: (1) Risk of macroeconomic fluctuations: The company's products and its downstream industries involve pillar industries in the national economy such as energy, transportation, textiles, construction, agriculture, etc., and are closely related to investment and consumer demand, and are clearly affected by macroeconomic fluctuations; (2) Industry policy risks: If there are major adverse changes in future industry-related industrial policies or industry plans, it may lead to changes in the market environment and development space faced by related industries, which in turn will have a certain impact on the company's operations; (3) Risk caused by exchange rate fluctuations: the value of RMB is affected by domestic and international economy and politics Due to the impact of various internal and external factors such as the situation and currency supply and demand, exchange rate fluctuations will cause the company to face exchange gains and losses in foreign currency-denominated capital lending activities and procurement and sales activities; (4) Risk of price fluctuations of major raw materials and products: The company mainly purchases raw materials such as crude oil, methanol, etc., and also produces important chemicals and chemical fiber products in the ethylene, propylene, and aromatic hydrocarbon industry chains. The chemical and chemical fiber industry in which the company is located has a certain periodicity. The market prices of major raw materials and products may fluctuate greatly with fluctuations in commodity prices such as oil, natural gas, and coal, as well as changes in the international political and economic situation, macroeconomic development conditions, and market supply and demand relationships, which in turn may have a certain impact on the stability of the company's operating conditions and performance levels.

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