Matters: the company announced that revenue in the first three quarters of 2020 was 16.3 billion yuan,-32% compared with the same period last year, and revenue in the current quarter was 6.4 billion,-15% year-on-year, + 23% compared with the same period last year. In the first three quarters of 2020, the net profit attributed to the parent company was 790 million yuan, + 50% compared with the same period last year. The net profit attributed to the parent company in this quarter was 300 million yuan, which was + 83% compared with the same period last year. The performance of maleic anhydride exceeded expectations, mainly due to the increase in the profit of maleic anhydride in the Q3 quarter. The price increase of maleic anhydride was mainly concentrated in September, rising to 9500 yuan / ton, up nearly 3000 yuan / ton compared with the end of August. In the whole Q3 quarter, the price of maleic anhydride was + 1239 yuan / ton, compared with the same period last year, the price difference of n-butane method was 1524 yuan / ton, the price difference of n-butane method was + 841 yuan / ton, and that of last year was + 822 yuan / ton. According to our estimates, the profit contributed by maleic anhydride products alone is about 100 million in this quarter, accounting for about 1/3 of the total profit.
Maleic anhydride profit is mainly due to two aspects: 1) maleic anhydride enterprise inventory is low: according to Zhuangchuang statistics, maleic anhydride inventory has dropped to only 1000 tons since August, the lowest this year; 2) downstream ushered in the peak season: September is the peak season of maleic anhydride downstream UPR, the operating rate of UPR in September reached 36%, up 9.1% from August.
The price of the company's main products is still low, and it is unlikely to continue to fall. At present, the prices of these products are all at a historically low level. The price of methyl ethyl ketone, the main profitable variety, is only at the historical 21% quantile level. The price of maleic anhydride is at the historical level of 45%. The current prices of methyl ethyl ketone and maleic anhydride are even less than half of their all-time highs. We expect that it is less likely that the current product price will continue to bottom downwards, and that the price will go up with the gradual improvement of terminal demand.
MMA first phase 100000 tons completed and put into production, expected to contribute profits in Q4, according to the company announcement, the first phase of 100000 tons of MMA has been completed and put into production, Q4 quarter is expected to contribute a quarter of profits, according to our estimates, is expected to contribute about 40 million of profits.
Profit forecasting, investment and rating
Taking into account the profit contribution of the MMA project in the Q4 quarter, we raised the company's profit forecast for 2020 to 910 million / (the previous value is 800 million) and kept the 2021 PE profit forecast for 2022 unchanged, that is, 13.6 / 2.27 billion, corresponding to 0.51 EPS 0.77max 1.28 yuan per share, the current stock price corresponding to PE is 16-10-6 times, maintaining the "overweight" rating.
Risk hint: the risk that the price of methyl ethyl ketone is still running at a low level; the risk that the profit of MMA is lower than expected; the risk that the profit of nitrile latex project is much lower than expected after it is put into production