Hualu Hengsheng (600426): The performance is basically in line with expectations. New projects are planned to be built to ensure future growth.

Hualu Hengsheng (600426): The performance is basically in line with expectations. New projects are planned to be built to ensure future growth.

Event: The company released its 2018 annual report and achieved revenue of 143.

5.7 billion, an increase of 37 every year.

94%, net profit attributable to mother 30.

2 billion yuan, an increase of 147 per year.

1%, EPS1.

86 yuan, ROE28.

33%, it is planned to distribute a cash dividend of 2 yuan (including tax) for every 10 shares.

Among them, 18Q4 earned 35.

08 million yuan, an increase of 10 every year.

5%, a decrease of 8 from the previous month.

9%; net profit attributable to mother 4.

$ 8.5 billion, an increase of 29 per year.

7%, a decrease of 43 from the previous month.


Comments: 1. The performance was basically in line with expectations, and the prices of several products rebounded after the holiday.

The company’s 50 formaldehyde, 10 toluene melamine (second phase), fertilizer functionalized part of the plant has been put into production in 18 years, Baichuan information data shows that 18 years of urea / DMF / adipic acid / acetic acid / isooctanol / glycol / methanol taxThe average price is 1960/5800/10300/4610/8750/7230/3140 yuan / ton, and the average annual price increase in 17 years is 20% / 0% / 2% / 47% / 10% / 2% / 11%.Growth continued on the basis of a 17-year high.

In terms of quarters, the first three quarters have a high degree of prosperity and a high level of performance. Q4 urea / DMF / adipic acid / acetic acid / isooctanol / diol / methanol tax average price is 2155/5450/9390/4770/ 9040/6580/2840 yuan / ton, a 3% /-4% /-11% /-2% /-1% /-14% /-3% increase from 2018Q3 compared to the previous month. Due to weak downstream demand, products other than urea causedThe quarterly price of the single-quarter price has declined to varying degrees, and the deviation of the performance from the previous quarter has decreased. However, from a comprehensive longitudinal perspective, the performance has basically met expectations.

By product, fertilizer / organic amine / adipic acid / acetic acid / polyol income was 29.

26 billion / 20.

9杭州桑拿.1 billion / 18.

32 billion / 24.

96 billion / 19.

41 ppm, a year-on-year increase of 48% / 10% / 0% / 49% / 38%, with a gross profit margin of 28% / 38.

5% / 23.

4% / 54.

4% / 4.

9%, sales were 186.

720,000 / 36.

940,000 / 19.

980,000 / 62.

29 digits / 29.

With 41 types, the company’s coal gasification platform has further consolidated its advantages, its product structure has been further optimized, the output of major products has gradually increased, and the production and sales of major products have remained stable.

The final current main product urea / DMF / adipic acid / acetic acid / isooctanol / toluene / methanol contains a tax price of 2050/5250/9100/3000/7950/5200/2450 yuan / ton, which is 4 higher than the pre-holiday low respectively.

5% / 9.

4% / 13.

8% / 0% / 1.

2% / 6.

1% / 15.6%, most product prices rebounded after the holiday, three months ushered in a new season of construction, downstream demand gradually increased to drive product prices.

2. The bottom of international crude oil prices rebounded, leading the cost advantage of coal chemical industry leaders.

Due to OPEC’s expectation of continued production cuts and Venezuela’s crude oil supply disruption and other factors, the price of WTI crude oil rose from less than US $ 45 / barrel at the end of December to the current US $ 58 / barrel. Recently, coal prices have reached the highest stability and the oil-coal ratio has continued to increase.The cost advantage of the leading coal chemical industry continues to emerge.

Relying on the 320 hydrophobic coal-water slurry gasification integrated platform, the company has derived six “top-line multi-head” chemical product series of six coal heads, which can dynamically adjust the production ratio of each product to achieve a weaker chemical enterprise than a single product.

3. 50 kg of diabetes is currently in full production and sales, and new projects such as amide and nylon new materials are invested to ensure the company’s future growth.

Since the 50-ton black project was officially put into operation in October 2018, the start-up load has continued to climb and is currently in a state of full production and sales; the company’s 2.6 billion investment has exceeded 50 euros for a long period of time. 5 The investment has decreased, and the current customers are basically polyester fiber companies.Bulk supply has been realized, and the cost is expected to drop by 800-1000 yuan / ton after production. At present, the low price of the product can still guarantee a certain profit.

The company announced plans to invest in new projects in the future and plans to invest 15.

USD 7.2 billion to build a quality improvement project for refined adipic acid, using benzene as raw material.

In the 66s / year, adipic acid and supporting cyclohexanol units are expected to increase annual income19.

8.6 billion, with a total profit of 2.

9.6 billion yuan; and plans to invest 49.

8 million USD constructive amide-based nylon new material project (30 tons / year), relying on existing coal gasification platform, taking carbonylation route and changing gas production as the direction, combining the company’s existing raw materials such as methanol and ammonia, steam, electricity, etc.Energy advantages, will create “cyclohexanone-caprolactam-nylon 6 chips” integrated industrial chain, the main construction of cyclohexanol, cyclohexanone and caprolactam equipment, supporting the construction of hydrogen peroxide, formic acid, sulfuric acid equipment, annual production of caprolactam 3010,000 tons (of which 20 tons are for personal use), 20 tons of formic acid, 20 nozzles of nylon 6 chips, 48 tons of ammonium sulfate, etc., it is expected to increase annual income 56.

13 trillion, total profit 4.

4.6 billion.

After the stable operation of the 50mm crystal project, the company continued to focus on the existing industrial chain layout. The restart of a new round of fixed capital expansion guaranteed the company’s future growth and eliminated the market’s choices for the company’s future development.

4. Increase the level to “Strongly Recommended-A”.

Net profit is expected to be 22 in 19-21.

7.9 billion / 25.

2.8 billion / 28.

42 yuan, corresponding to 10 for PE.

9 times / 9.

8 times / 8.

7 times, considering the possibility of continued decline in product prices, and the company plans to invest in new projects to dispel market doubts about future growth and upgrade the company’s rating to “strongly recommended -A” rating.

Risk factors: Product prices fall and cholesterol items are not digested as expected.