The core point. The company has laid out the whole industry chain of "phenol, acetone-bisphenol A-polycarbonate". It has built a production capacity of 700,000 tons / year of phenol acetone, 240,000 tons / year of bisphenol An and 130,000 tons / year of non-phosgene polycarbonate. In the future, the company will rely on the existing industrial foundation, improve the self-sufficiency of raw materials such as DMC and propylene, and realize the extension and strengthening of the industrial chain.
Corporate profits are expected to rise sharply in 2021. In 2020, the company's total operating income was 4.39 billion yuan, an increase of + 9.86% over the same period last year, and its net profit was 715 million yuan, an increase of + 237% over the same period last year. The company expects to achieve a net profit of 20.2-2.15 billion yuan in 2021, a sharp increase of 182% over the same period last year. The company's profit is expected to increase significantly in 2021, mainly due to: (1) full-load production of new phenolone units, a substantial increase in production capacity; (2) strong product demand, higher prices of phenol, bisphenol A, polycarbonate and other products. From the perspective of business structure, the company is mainly polycarbonate industry chain. In 2020, polycarbonate, bisphenol A, acetone and phenol accounted for 38%, 26%, 15% and 9% respectively, and gross profit accounted for 22%, 41%, 15% and 9%, respectively.
We will strengthen the construction of raw material production capacity and improve the integrated layout of the industrial chain. The net fund raised by the company's IPO is 3.88 billion yuan, which is mainly used to invest in the construction of "350,000 tons / year phenol, acetone, isopropanol joint project", "100000 tons / year high purity dimethyl carbonate project" and "600,000 tons / year propane dehydrogenation and 400,000 tons / year high performance polypropylene project" and so on. Among them, the joint project of 350,000 tons / year of phenol, acetone and isopropanol was officially put into production in November 2020.
600,000 tons / year propane dehydrogenation and 400,000 tons / year high performance polypropylene project. The total investment of the project is 5.23 billion yuan. After it is completed and put into production, the company will have a production capacity of 600,000 tons of propylene per year. In addition to being used in polypropylene production, the surplus can basically independently protect the raw materials of phenol and acetone units, reduce procurement costs, and enhance the company's ability to resist the potential price fluctuations of upstream raw materials and the imbalance between supply and demand.
100,000 tons / year high purity dimethyl carbonate project. Dimethyl carbonate is one of the raw materials used in the preparation of polycarbonate. The company has a polycarbonate production plant with a production capacity of 130,000 tons per year, but it is not equipped with a DMC production project. The "100000 t / a high purity dimethyl carbonate project" has a total investment of 538 million yuan. After it is completed and put into production, about 50,000 tons of DMC can be used by the company for its own use, reduce the purchasing cost of raw materials, and improve the upstream and downstream industrial chain of the company.
Profit forecast and investment rating. We estimate that the return net profit of the company from 2021 to 2023 is 2.13 billion yuan, 1.73 billion yuan and 2.19 billion yuan respectively, and the EPS is 3.87,3.15,3.98 yuan respectively. With reference to the comparable company valuation, according to the 2021 PE 11-13 times, the reasonable value range is given a reasonable value range of 42.57-50.31 yuan, with a "better than the market" rating for the first time.
Risk tips: product prices fluctuate sharply; the polycarbonate industry chain is declining; and the progress and profitability of projects under construction are less than expected.