Event
Annual report 2020: the operating income was 3.795 billion yuan, an increase of 542.67% over the same period last year, and the net profit was 231 million yuan, an increase of 4203.2% over the same period last year. Corresponding to Q4 single-quarter performance of 1.274 billion yuan.
Quarterly report for 2021: business income reached 1.679 billion yuan, an increase of 100.4% over the same period last year; net profit returned to the home was 546 million yuan, an increase of 1034.38% over the same period last year and 1035.4% over the same period last year.
Brief comment
Q4 started a boom in acetic acid, and the performance was released as scheduled.
The single-quarter net profit of 20Q1-21Q1 is 0.48,0.40,0.45,1.78 and 546 million yuan respectively, which fully reflects the ups and downs of the acetic acid industry in the past 20 years: the acetic acid industry fell to the bottom in the first half of the year with the continuous attack of the epidemic situation at home and abroad, but since the second half of the year, due to the rapid recovery of downstream demand and the continuous limitation of supply in the industry, the price of acetic acid has risen rapidly since Q4.
Since the beginning of the year, after a brief decline in the price of acetic acid, the industry has successively experienced a cold wave in the United States and domestic manufacturers have overhauled one after another, and the price of acetic acid has soared again, reaching an all-time high of nearly 8000 yuan per ton. The company's performance is also released in Q1.
The tight balance between supply and demand will still be maintained, and continue to be optimistic about the prosperity of the acetic acid industry.
On the supply side, the acetic acid industry has high barriers to entry and limited new production capacity in the future. At present, the domestic production capacity is about 9.25 million tons, and some small and medium-sized production capacity in the industry has actually lost its production capacity, and the production equipment needs to be overhauled frequently, and the actual domestic operating rate is about 90%. On the other hand, since the explosion in Yima, Henan Province in 2019, enterprises in the industry have generally started cautiously and lowered the upper limit of the operating rate. Huayi Group's 500000 tons of new capacity is expected to be put into operation in the third quarter, but there is no new capacity in the industry.
On the demand side, the downstream market is gradually picking up. The largest downstream demand for acetic acid is the rapid expansion of PTA, private refining and chemical industry in recent years, and the rapid growth of PTA production capacity, and the subsequent domestic production capacity is expected to increase a lot, which is expected to bring an average of about 400000 tons of acetic acid demand per year in 21-23 years. Other areas of acetic acid demand, such as EVA, ethyl acetate, acetic acid to ethanol, are also incremental, and it is expected that the next few years will also provide 100-200,000 tons / year acetic acid demand.
Therefore, there is still a tight balance between supply and demand in the industry, and in terms of comprehensive supply and demand, the growth of industrial demand in 21 and 22 years will still be greater than that of supply. At present, the price of acetic acid is close to 8000 yuan / ton, which is difficult to maintain in the long run, but we are still optimistic that under the support of the pattern of supply and demand, the price of acetic acid is expected to run at a higher level and maintain a high economy.
As a single main business, acetic acid has high performance elasticity.
Acetic acid business is the core asset of the company. At the end of 2019, the company completed a major asset restructuring, with the largest domestic acetic acid production capacity of 1.2 million tons, accounting for 14% of the country's total production capacity, and has a complete industrial chain from methanol manufacturing to acetic acid production, with outstanding scale advantages and international competitiveness. In August 2020, the company plans a non-public offering of shares, and the funds raised will be used for acetic acid gas production technology upgrading construction projects to further reduce production costs and expand scale advantages.
In 2020, the operating income of acetic acid and derivatives reached 3.149 billion yuan, accounting for more than 87%. The prosperity of the acetic acid industry has brought great flexibility to the performance of the company.
It is estimated that the 21-year, 22-year and 23-year net profit of the company is 16.52,17.52,1.758 billion yuan respectively, corresponding to PE 10.2,10.2,9.6 times, maintaining the overweight rating.
Risk hint
Downside risk of acetic acid price
