Hualu Hengsheng (600426): New material project with better-than-expected results in 1Q19 helps mid-term and long-term development

Hualu Hengsheng (600426): New material project with better-than-expected results in 1Q19 helps mid-term and long-term development

The first quarter of 2019 results exceeded expectations Hualu Hengsheng announced the first quarter of 2019 results: operating income of 35.

43 trillion, an annual increase of 3%; net profit attributable to the parent company6.

42 trillion, down 12 a year.

51%, corresponding to a relative profit of 0.

39 yuan, exceeding our expectations, mainly due to the increase in urea, cholesterol production and sales and cost-side coal, pure benzene and starch prices, the gross profit margin increased in the first quarter.

Development Trend Acetate, organic amines, and adipic acid prices have fallen and costs have increased, resulting in lower profits.

In 2018, the company’s urea and cholesterol production reached 100/50 carboxylic acid accumulation, 1Q19 fertilizer and polyol sales increased 57% / 220%, revenue increased 51% / 130%; 19Q19 average prices of acetic acid, organic amines and adipic acid products fell 31% / 22% / 27%, cost-side coal / pure benzene prices fell by 15% / 30%; comprehensive urea, carbohydrate sales growth and some products, the impact of decline in raw material prices,杭州夜生活网 gross profit in the first quarter of 19 only decreased by 20.69 millionYuan, gross margin short-term interest rate 1.

6ppt to 28.

Expenditure increased significantly. Sales, management and R & D expenses in the first quarter of 19 increased by 0 each time.

960,000 yuan, resulting in a reduction in return to mother’s profit of 0.

9.2 billion yuan.

The spread of oil and coal has widened and demand is expected to pick up, and the company’s product profit is expected to rebound.

At present, the prices of the company’s DMF, adipic acid, potassium sulfate, etc. are below the historical average and at the bottom; the Brent price has gradually increased year to date.

8% to 71.

US $ 97 / barrel, while coal prices rose sharply during the same period9.

At 1%, the spread of crude oil and coal has widened, and at the same 淡水桑拿网 time demand expectations have improved with the gradual recovery of the macro economy, and product prices and profits have promoted a rebound.

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

The company plans to invest 15.

7.2 billion yuan construction 16.

66 initial refined adipic acid and supporting cyclohexanol projects, with a construction period of 24 months, are expected to achieve an average annual revenue of 19 after reaching production.

90,000 yuan, annual average profit budget2.

9.6 billion; meanwhile, it plans to invest 49.

Construction of 30-inch caprolactam, 20-mm crystal, 20-inch nylon 6 chips and other projects for 8 million US dollars. The construction period is 30 months. The project is expected to achieve an average annual income of 56 after the project reaches production.

10,000 yuan, annual average profit budget 4.

4.6 billion.

Earnings forecast was raised by 6% / 6% to 1 due to better-than-expected results.


70 yuan / share.

Estimates and recommendations At present, the company can continue to correspond to the 2019/20 P / E ratio of 10.


6x; We raise our target price by 21 as we raise our profit forecast and the industry’s estimated hub moves upwards.

2% to 20 yuan, 23% more room for growth than before, the target price corresponds to December 2019/20.


8 times PE, maintaining the recommended level.

Crude oil prices rose sharply, and product demand exceeded expectations.