Event

On the evening of April 9, Longyu fuel released its 2012 report that the company's annual operating income was 7.77 billion yuan, an increase of 42.8% over the same period last year; the operating profit was 75.63 million yuan, and the net profit belonging to shareholders of the listed company was 58.34 million yuan, a decrease of 28% over the same period last year, which was basically the same as our expectation; realized earnings per share of 0.35 yuan.

Brief comment

The business of blending oil is weak, and non-blending oil is developing rapidly.

The company's annual fuel oil revenue was 7.73 billion yuan, an increase of 43% over the same period last year; the total fuel oil trade volume was 1.39 million tons, up 37% from the same period last year, of which the decline in blending oil revenue was offset by a sharp increase in non-blending oil business revenue.

Affected by the macroeconomic downturn at home and abroad in the past 12 years, the growth of domestic transportation demand for fuel oil has slowed down, affecting the company's blending fuel oil sales. The company's revenue from the blending oil business was 3.24 billion yuan, down 12% from the same period last year, mainly due to a 10% year-on-year decline in the sales volume of blended oil, while the realized price was 5035 yuan, a slight decline over the same period last year. Of this total, Kofa's oil revenue was 2.68 billion yuan, down 8% from the same period last year; the impact of insufficient demand on shipping was more obvious. The company's aquatic refueling revenue was 560 million yuan, down 27% from the same period last year, and the sales volume was 115000 tons, down 28% from the same period last year. At the same time, the gross profit per ton of blended oil was only 193 yuan, a decrease of 38% over the same period last year.

When the development of the blended oil business was blocked, the company vigorously developed the non-blended oil business, with a trade volume of 746000 tons, an increase of 149% over the same period last year, and a gross profit per ton of 211 yuan, up 45% over the same period last year. The proportion of revenue and gross profit contribution of unblended oil has risen sharply in the past 12 years, both exceeding 50%, making it an important source of profit for the company. This business includes the oil supply business of georefining, and we have always been optimistic about the oil supply business of georefining. The domestic large-scale georefining enterprises have a processing capacity of about 160 million tons in 12 years, and there is a huge gap in the demand for processing raw materials. It is expected that oil supply to georefining will become one of the important growth points of the company's performance.

Taking into account both domestic and foreign resources, Singapore companies are expected to play an important role.

At present, all kinds of fuel oil resources of the company come from domestic enterprises and traders. The establishment of Singapore overseas company will help the company contact overseas resources, open up channels and customers, and promote the rapid development of the company. Overseas fuel oil is rich in resources and a wide variety of choices, which can not only meet the broad needs of domestic georefining, but also provide resources for the company's future bonded ship oil supply business.

With the slowdown of macro-economic development, the demand for fuel oil in the domestic transport industry is slightly weak, but there is great potential for the development of fuel supply from bonded ships. Compared with Singapore, the largest duty oil market, the foreign trade throughput of Chinese ports is 4.5 times that of Singapore, but the oil supply volume of bonded ships is only 1 / 4 of that of Singapore, which shows the huge growth space of the oil supply market of bonded ships. In recent years, the state has gradually opened up the oil supply market of bonded ships, allowing private enterprises to participate in it, and the company's application is expected to be approved. Getting the fuel supply qualification of the bonded ship will become the company's fuel oil business will be transformed and has a broad prospect.

Profit forecast

The company is expected to earn 0.48 per share in 13-15 years, 0.62 yuan per share, and 1.02 yuan per share, maintaining the "overweight" rating.