The price of acetic acid continues to rise, and the company's performance continues to hit record highs. On April 23, the company released its annual report on April 23. In 2020, the company achieved 3.795 billion yuan in revenue, an increase of 542.67 percent over the same period last year, and realized a net profit of 231 million yuan, turning a loss into a profit over the same period last year. At the same time, the company released a report for the first quarter of 2021, 2021Q1 achieved a revenue of 1.679 billion yuan, an increase of 100.40% over the same period last year, and a net profit of 546 million yuan, an increase of 1034.38% over the same period last year. Combined with the company's performance report and the continuous rise in acetic acid prices, we raise the company's profit forecast for 2021-2022 and increase the profit forecast for 2023. It is estimated that the net profit from 2021 to 2023 will be 20.10,13.04 and 1.329 billion yuan, respectively, and the EPS will be 1.72,1.12 and 1.14 yuan respectively. The current stock price corresponds to PE 8.3,12.9,12.6 times. The company's acetic acid price continues to rise, the company as a leader is expected to fully benefit, maintain the company's "buy" rating.
Downstream demand growth, acetic acid enterprises stop constantly, supply and demand mismatch acetic acid price even hit a new high demand end, according to Zhuo Chuang information, 2020 to now there are 13.3 million tons of PTA put into production, according to our estimates, only considering this part of PTA is expected to drive acetic acid demand 532,000 tons / year, greatly boost acetic acid demand. At the supply end, most of the acetic acid plants are old, and the acetic acid plants have been shut down frequently since September 2020. Among them, Q1 in 2021, Henan Shunda 450000-ton plant stopped for a quarter, and 1.3 million-ton acetic acid plant in the United States stopped due to severe cold weather, directly stimulating the price of acetic acid to reach a new high in recent years. According to our estimation, based on the annual sales of 1.2 million tons of acetic acid, the price of acetic acid increases by 100 yuan per ton, which can increase the net profit of the company by 90.27 million yuan. According to Zhuochuang Information, the average annual price of Q4 acetic acid reached 3419 yuan / ton in 2020 (+ 21.11% compared with the same period last year), and the average annual price of Q1 acetic acid reached 5353 yuan / ton in 2021 (year-on-year + 111.5%), helping the company's Q1 performance to reach a new high in 2020 and 2021.
The acetic acid industry is expected to maintain a tight balance pattern in 2021, and the price is expected to maintain a relatively high level. In recent years, the production capacity of the acetic acid industry has been limited due to factors such as the long life of the plant and the increasing pressure on environmental protection. According to Zhuochuang, only 500000 tons of new production capacity in Huayi, Guangxi, will be put into production in 2021. In 2021, 11.4 million tons of PTA may still be put into production, which is expected to greatly boost acetic acid 456 million tons / year, and the tight balance pattern of acetic acid may be intensified. The price of acetic acid is expected to remain relatively high in 2021, and it is optimistic that the company will fully benefit from being a leader.
Risk tips: the progress of project construction is not as expected, product prices have fallen sharply, macroeconomic decline, and so on.
