occurrences
The company released its 2024 semi-annual report. In the first half of 2024, the company achieved revenue of 97.067 billion yuan, a year-on-year increase of 10.77%, and net profit to mother of 8.174 billion yuan, a year-on-year decrease of 4.6%. The performance was in line with expectations.
profiling
The overall operation of the company has remained steady, and financial expenses and income tax expenses have increased. The company's polyurethane sector achieved revenue of 35.455 billion yuan, up 8.19% year on year; petrochemical business achieved revenue of 39.575 billion yuan, up 9.5% year on year; fine chemicals and new materials sector achieved revenue of 12.979 billion yuan, up 15.23% year on year. In terms of expenses, the division's sales expenses in 2023 were 0.733 billion yuan, up 15.50% year on year; management expenses were 1.421 billion yuan, up 28.56% year on year; financial expenses were 1.109 billion yuan, up 58.04% year on year, mainly due to increased interest expenses due to increased interest-bearing debt; the company's R&D expenses were 2.081 billion yuan, up 16.18% year on year. The company maintained a high level of R&D investment and built a good technical foundation for the company's long-term layout. In terms of income tax expenses, the company's income tax expenses in the first half of the year were 1.491 billion yuan, an increase of 64.26% over the previous year, mainly due to the tax benefits enjoyed in the same period last year.
Prices of polyurethane and petrochemical products have remained stable as a whole, the price of pure benzene as a raw material has risen, coal has declined, and propane butane has remained stable. Demand for pure MDI products was stable in the first half of 2024, and the average market price was around 20,000 yuan/ton. The market price of polymeric MDI products fluctuated upward, and the downstream refrigerator and freezer industry maintained a growing trend. The average market price in the first half of the year was around 16,500 yuan/ton. The market supply of TDI products is sufficient, and the market price declined. The average price in the first half of the year was 15,200 yuan/ton. Soft foam polyether products. The home furnishing industry declined year-on-year in the first half of the year, and domestic and foreign sales in the automotive industry showed an upward trend. The average market price of polyether in the first half of the year was around 9070 yuan/ton. In the first half of 2024, petrochemical products rose and fell compared with the same period last year. The average price of pure benzene was 8,652 yuan/ton, an increase of 24.35% compared with the same period last year. The average closing price of 5,000 kcal thermal coal was 777 yuan/ton, a decrease of 13.28% compared with the same period last year. The average price of propane CP was 609 US dollars/ton, down 0.16% from the same period last year; the average price of butane CP was 613 US dollars/ton, the same as the same period last year.
Profit Forecasts, Valuations, and Ratings
We predict that in 2024-2026, the company's net profit to mother will be 18.062, 20.431, and 21.918 billion yuan respectively, corresponding EPS will be 5.75, 6.51, and 6.98 yuan/share, respectively. The PE corresponding to the current market value will be 13.02X, 11.51X, and 10.73X, respectively, maintaining a “buy” rating.
Risk warning
There is a risk of sharp fluctuations in raw materials, insufficient demand affects sales volume and product prices, and the launch of new projects falls short of expectations.