Hengyi Petrochemical (000703) Comment Report: The first quarter of 2019 performance is not up to expectations, optimistic about the company’s future development

Event: On April 23, 2019, the company released the 2019 Q1 quarterly report, which ended until the end of March 2019. Hengyi Petrochemical achieved operating income of 209.

76 ppm, an increase of 25 in ten years.

93%; net profit attributable to mothers4.

23 ppm, a decrease of 42 per year.

88%.

Investment points: PTA prices rebound, PTA-PX spreads decline, and the company’s Q1 performance falls short of market expectations: 2019Q1 company’s return to parent net profit4.

2.3 billion, a decrease of 42 every year.

88%, the performance is less than expected, initially due to the increase in corporate expenses, the company’s Q1 increased research and development expenditures, research and development 杭州桑拿网 expenses increased by 192% to 1.

36 billion; the company’s financial expenses increase by 301% to 1.

7.5 billion, mainly due to the increase in the company ‘s financing scale and the increase in expenditures and exchange loss gains and losses; the company ‘s taxes also increased by 128% to zero.

4 billion; the company’s fair value also changed from 0 in 2018Q1.

2.3 billion translates to -0 in 2019Q1.

22 billion.

From the product point of view, the average price of Q1PTA in East China is 6458 yuan / ton, which has increased by 5718 yuan / ton every year by 12.

94%, the average price of PX in East China was 8,665 yuan / ton in the same period, and 7,360 yuan / ton in the past year increased by 17.

73%, the average price of polyester chips / POY / DTY / FDY is basically the same as the same period of last year, which 北京夜网 was 7788/8467/10326/9858 yuan / ton, the average price of PTA-PX was 740 yuan / ton, last year 861 yuan / ton fell14.

05%, the decline in spreads led to a decline in processing fee income.

The PTA industry chain maintains prosperity. The company’s second-quarter performance is expected to be optimistic: At present, the operating rate of polyester remains at a high level of 89-92%, the operating rate of PTA remains at 75-80%.Is 2.

5-3.

In 5 days, the demand for PTA and downstream polyester continued to be strong. We expect the downstream polyester filament production capacity to increase at a rate of 7-8%, while the demand growth rate is expected to be 8-9%, and the supply and demand layout is improving.

In 2019, the new PTA production capacity is limited, the overcapacity phenomenon has changed, supply and demand have tightened, and the company’s PTA equity capacity has reached 1,350 tons. The company’s PTA capacity accounts for nearly 40% of the country’s effective capacity, which has a greater capacity scale advantage and bargaining power.Has been improved.
At present, the mainstream price of PTA in East China has increased steadily, with the range between 6440-6775 yuan / ton.

It is expected that the prosperity of the PTA industry chain is expected to continue, and the company’s second-quarter performance is optimistic.

In the 1980s, the first phase of the Brunei Refining and Chemical Project was about to be put into production, and the industrial chain was integrated and upgraded: The Brunei project was being constructed and installed as planned, and the project had gradually incurred investment during the construction period.

USD 1 billion, and the overall construction progress of the project has been gradually completed.

78% entered commercial operations in the third quarter.

With the commissioning of the Brunei Refining and Chemical Project, the company will open up the upstream and upstream raw materials and realize the entire industrial chain layout.

The integration of the industrial chain can reduce the company’s future production costs, improve its ability to resist risks, and increase its profitability.

Profit forecast and investment advice: The company’s net profit for the years 19-20 is expected to be 41.

07, 51.

2.9 billion, corresponding to PE of 8.

02, 6.

46. Maintain the “overweight” rating.

Risk factors: The price of PTA has fallen sharply, the price of polyester has fallen sharply, and the implementation of the Brunei project has not met expectations.

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