Incident: The company released its 2015 annual report. In 2015, the company achieved operating income of 9.664 billion yuan, a year-on-year decrease of 27.12%, and achieved net profit attributable to shareholders of listed companies of 188 million yuan, an increase of 105.90% over the previous year, equivalent to basic earnings of 0.23 yuan per share. At the same time, the company announced its performance forecast for the first quarter of 2016. The net profit of the mother for the first quarter of 2016 is expected to be 0.61-112 million yuan, an increase of 207%-296% over the previous year.
Comment:
Losses after deduction in 2015, and the performance forecast for the first quarter of 2016 exceeded expectations. The company is mainly based on three industrial chains. One is the chlor-alkali chemical industry chain with PVC paste resin as the lead, the second is the new chemical materials industry chain with CPP and DCC as upstream, and the third is the polyether polyol industry chain at Blue Star Dongda. Affected by factors such as falling crude oil prices, overcapacity for products related to the domestic petrochemical industry chain, and falling demand in the downstream market in 2015, after deducting the non-recurring profit and loss of the company's relocation, the company actually lost about 200 million yuan. In the first quarter of 2016, affected by the recovery in crude oil prices and the shutdown of some domestic production capacity, etc., prices of PVC paste resin and petrochemical products such as acrylic and esters picked up. The company is expected to achieve good profits in the first quarter, and the performance forecast exceeded expectations.
The price of PVC paste is picking up, and production capacity is expected to be released after the company's relocation is completed this year. The industry slump in 2015, the PVC paste industry withdrew part of its production capacity. Coupled with the rise in crude oil prices since 2016, the cost of ethylene method manufacturers increased, so PVC paste prices picked up. The company expects to complete all relocation work within June of this year. After the relocation is completed, the company's 200,000 tons of PVC paste production capacity is expected to be released one after another.
Blue Star Dongda's earnings exceeded its performance promises, and it is expected that it will continue to contribute stable profits this year. In 2015, the majority shareholder injected Blue Star Dongda. The main product was polyether polyol. In 2015, Blue Star Dongda made a net profit of 105 million yuan, exceeding performance promises. Due to the rise in crude oil prices since this year, product prices have risen, and the company's position in the polyether polyol industry, it is expected that 2016 will continue to deliver stable profits.
The controlling shareholder's asset securitization is accelerating, and the company can be expected as the only petrochemical platform in the future. China Chemical Group Corporation, the actual controller of the company, has always adhered to the strategic idea of integrating domestic collaborative assets based on capital operations, overseas mergers and acquisitions and domestic sector peers, using its professional ability to integrate domestic collaborative assets, achieve securitization through the segmentation of its listed company platforms, integrate its assets, and accelerate its securitization process. The company is currently the only listing platform for the petrochemical sector under China Chemical Group Co., Ltd., so there are high expectations for asset consolidation.
Profit forecast and rating: We expect the company's revenue in 2016-2018 to reach 10.188 billion yuan, 10.912 billion yuan and 11.637 billion yuan respectively, up 5.42%, 7.11% and 6.64% year-on-year, and net profit of the mother to reach 439 million yuan, 275 million yuan and 315 million yuan respectively, up 133.63%, -37.27% and 14.46%, EPS to reach 0.54 yuan, 0.34 yuan and 0.38 yuan respectively, corresponding to April 19, 2016 The dynamic PE of the daily closing price (7.20 yuan/share) was 13 times, 21 times, and 19 times, respectively, maintaining the “increase in holdings” rating.