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Hualu Hengsheng (600426): New material projects with 3Q19 results in line with expectations help mid- and long-term development

Hualu Hengsheng (600426): New material projects with 3Q19 results in line with expectations help mid- and long-term development

Performance review remains outperforming the industry1?
3Q2019 results 厦门夜网 are in line with our expectations of 1 announced by Hualu Hengsheng?
3Q2019 results: operating income 106.

100 million, down 2 a year.

2%; net profit attributable to mother 19.

12 ppm, a decrease of 24 per year.

5%, corresponding to a profit of 1.

18 yuan, in line with our expectations.

  Development trend product prices lead to 1?
3Q19 profit decreased year by year.

Due to fertilizer and tungsten carbide increasing capacity contribution, fertilizer and polyol sales increased by 39% / 180% to 186 in the first three quarters of 1919.


5 ;; but because of 1?
In 3Q19, the sales prices of fertilizers, acetic acid and derivatives, organic amines, adipic acid and intermediates fell by 4% / 34% / 15% / 22% and the cost increase during the period increased by 2%.

$ 5.6 billion, leading to company profits exceeding expectations.
3Q19 company’s gross profit margin fell by 4.

3ppt to 27.

9%, the net profit margin is reduced by one level.

3ppt to 18%.

  The profit in the third quarter of 19Q was a quarter-on-quarter profit margin, but still maintained a high profit margin.

The company’s revenue in the third quarter of 19 was 35.

US $ 3.5 billion, which remained stable month-on-month, and net profit attributable to mothers fell 9% month-on-month.

5% to 6.

30,000 yuan.

In the third quarter of 19th, the company’s fertilizer price decreased by 7% month-on-month to 1,440 yuan / ton, and the price of acetic acid and derivatives rose 14% month-on-month.

4% to 2,812 yuan / ton, the prices of other products were basically stable from the previous month; 3Q19 sales of acetic acid and adipic acid decreased by 6 from the previous month.

7% / 3.

Sales of 6% organic amines and polyols increased 17% / 11% month-on-month.

Affected by the decline in fertilizer prices and the increase in raw material pure benzene and propylene market prices by 20% / 9% month-on-month, the company’s gross profit margin decreased by 2% in the third quarter of 19th.

6ppt to 26.

7%, net profit margin fell by 1 chain.

8ppt to 17.


In the third quarter of 19th, the price of the company’s main products was still at the bottom of history, but thanks to the company’s advanced coal gasification platform, flexible co-production model and excellent cost control capabilities, it still maintained a high level of profitability.

  Refined adipic acid and new material projects help the company’s medium and long-term development.

The company plans to invest 15.

USD 7.2 billion will be invested in projects such as refined adipic acid and supporting cyclohexanol. The company expects an average annual revenue of 19 after reaching production.

90,000 yuan, annual average profit budget2.
At the same time, the company plans to invest in projects such as 30 caprolactam, 20 crystals, and 20 nylon 6 chips. The company expects to have an average annual revenue of 5.6 billion U.S. dollars after annual production, and maximize its annual profit4.

4.6 billion.

The construction of pure adipic acid and new materials projects will serve as the basis for the company’s long-term development potential.

  Earnings forecasts and estimates Due to the weak demand in the fourth quarter and the pressure on chemical prices, we have lowered our 2019/20 net profit forecast for mothers4.

4% / 4.
1% to 24.


52 trillion, the company currently corresponds to 2019/20 P / E ratio of 10.

7/10 times.

Due to the estimated conversion, we maintain the target price of 20 yuan, which has 23% growth space compared with the previous year. The target price corresponds to the 13 / 12x PE ratio of 2019/20, and we maintain an outperform industry rating.

  Crude oil prices rose sharply, and prices of raw materials such as coal rose sharply.