Main viewpoints

1. The company's new VE production capacity basically reached production in the fourth quarter, and the price of beneficial products remained high. The market price of VE powder in the first quarter was maintained at a high level of 85-130 yuan / kg. The company's 20,000 tons of VE (oil) production capacity has completed climbing in the fourth quarter, and the production capacity has basically reached the design capacity, benefiting from the maintenance of product prices. Recently, some domestic enterprises have stopped quoting for VE, and prices are expected to continue to rise. The impact of the BASF explosion on the company is expected to last at least until April this year, and VE prices are expected to remain high. Even if there is a correction in product prices in the future, considering that the company adopts self-developed low-cost processes and has low-cost raw materials, its overall cost is expected to be 30% lower than other processes and is expected to remain profitable.

According to the production capacity of 40,000 tons of powder, it is estimated that for every 10 yuan / kg increase in the price of VE powder, the company's EPS will increase by 0.11 yuan.

two。 The reserve of low-cost PPO monomer production technology is expected to become a growth point in the future. PPO (polyphenylene oxide) is one of the five general engineering plastics in the world. MPPO formed by blending with other plastics is the most important application in the downstream. There is a great gap between China and overseas in the technical level of related fields. In 15 years, China has a production capacity of 9900 tons of MPPO, an output of 9200 tons and a consumption of 23000 tons, which needs to be imported in large quantities. The company has completed the process research and development of PPO in 16 years, and the production cost of monomer (2j6-dimethylphenol) can be 30% cheaper than that of its peers, and it has been put into production of 7000 tons of 2jin6-dimethylphenol in 16 years, with a co-production of 3000 tons of o-cresol (used as a pesticide intermediate). The company expects that the project will contribute 150 million yuan in annual income, an increase of 20 million net profit. The company continues to promote PPO product development, which is expected to become an important product supplement for the company in the future.

3. Investment suggestion

We estimate that the company's net profit for 17-19 years will be 1.66 billion yuan, 1.66 billion yuan, respectively, and the corresponding EPS will be 0.11, 0.44, 0.63 yuan, respectively. At present, the share price corresponding to PE will be times that of 47-12-8, maintaining the "recommendation".

Rating.

4. Risk hint

There is something wrong with the operation of the new vitamin E plant; the plastic rice net is unable to meet its performance commitments.