The company's net profit for the first three quarters increased 77% year on year. Revenue/net profit for the first three quarters was $7.92/1.13 billion, or +46.9%/76.5%, compared to +46.9%/76.5%. Of these, net profit for the Q3 quarter was 210 million yuan, -1.8% YoY, and -53.5% YoY.
The price increase for coke Q3 decreased in a single quarter, and profit per ton of coke declined month-on-month. In the first three quarters, the company's coke production and sales volume was 140/1.46 million tons, +8/11.5% year on year, and the average sales price was 2,798 yuan/ton, +42.5% year on year. The sharp rise in volume and price led to a significant increase in coke business performance. In Q3, in a single quarter, coke production and sales volume was 380/390,000 tons, -27.9%/-30.6%. The month-on-month decline in production was mainly affected by environmental production restrictions in Shandong. The average sales price was 3,258 yuan/ton, +24.7% month-on-month. However, due to the significant increase in the price of raw coking coal month-on-month, the Q3 company's raw coal purchase price was 2,073 yuan/ton, +555 yuan, an increase of 37%. We estimate that gross profit per ton of coke decreased by about 75 yuan/ton month-on-month. Looking ahead to Q4, we believe that due to continued coking production restrictions, coke prices have increased, and superimposed cost increases have slowed down, profit per ton of coke is expected to increase month-on-month.
The release of quarterly production of carbon black Q3 is slow, and costs have increased dramatically as prices have stabilized. In the first three quarters, the company's carbon black production and sales volume was 275/268,000 tons, +24.6/ 24.5% year on year. The average sales price was 6,740 yuan/ton, +58.4% year on year. In Q3, in a single quarter, carbon black production and sales volume was 107/104,000 tons, +22.6/ 20.3% month-on-month, and the average sales price was 6,749 yuan/ton, -0.4% month-on-month. The carbon black business maintained a high boom. The company added 480,000 tons of carbon black and was put into operation one after another in April 2021, but due to the low Q3 output of its supporting PDH and PP projects, the company's Q3 carbon black production has not increased significantly.
The PDH and PP projects Q3 have been put into operation, and raw material prices are at historically high levels. The company's 900,000-ton PDH and 450,000-ton high-performance PP projects have been put into operation one after another. Q3 propylene production and sales volume is 27/60,000 tons, and polypropylene production and sales volume is 0.9/20,000 tons. We believe that since the project has just started operation, the fixed and operating costs in the early stages are relatively high, the price of propane, which is the superposition main raw material, is high, and the purchase cost for Q3 is 4,901 yuan/ton. We expect a small profit contribution this year.
Profit forecasting and valuation. We believe that since the third quarter, raw material costs for the company's various businesses have risen sharply. Combined with environmental production restrictions and energy consumption control, product output has declined. The company's profit in the second half of the year was lower than in the first half of the year, and we lowered the company's net profit for 21-23 to 1,488/20.83/2,463 billion yuan. Assuming that PDH and PP projects will only be fully produced in 2022, we will conduct segment valuations based on the company's performance in 2022.
In 2022, net profit from the company's original business and new carbon black business was about 1.73 billion yuan. Refer to comparable companies, giving the company 8 to 9 times PE valuation in 2022, corresponding market value of 138 to 156 billion yuan; referring to comparable companies, net profit attributable to the company's PDH and PP business was about 350 million yuan. Referring to comparable companies, giving the company a PE valuation of 11 to 12 times in 2022, the corresponding market value was 3.9 to 4.2 billion yuan, with a total market value of about 17.7 to 19.8 billion yuan. Considering the company's current total share capital of about 855 million shares, the company corresponds to a reasonable value range of 20.73 to 23.16 yuan, maintaining a “superior to market” rating.
Risk warning. Demand fell sharply, and the commissioning of new construction projects fell short of expectations.