\u3000\u3 Shengda Resources Co.Ltd(000603) 225 Xinfengming Group Co.Ltd(603225) )
Event: the company released the first quarter report of 2022. In 2022, Q1 achieved an operating revenue of 10.6 billion yuan, a year-on-year increase of – 2% and a month on month increase of + 29%; The net profit attributable to the parent company was 285 million yuan, with a year-on-year increase of – 43% and a month on month increase of – 11%; The net profit attributable to the parent company after non deduction was about 310 million yuan, with a year-on-year increase of – 37% and a month on month increase of – 0.8%.
Comments:
The increase of cost, the pressure of polyester gross profit and the decrease of sales volume led to the decline of Q1 performance in 22 years: in Q1 of 2022, the average prices of PTA, POY, FDY and DTY were 5635 yuan / ton, 7975 yuan / ton, 8697 yuan / ton and 9574 yuan / ton respectively, with a year-on-year increase of + 35%, + 17%, + 10% and + 13% respectively, and a month-on-month increase of + 14%, + 1%, + 1% and + 1% respectively; The price differences of PTA, POY, FDY and DTY were 546 yuan / ton, 1212 yuan / ton, 1851 yuan / ton and 2628 yuan / ton respectively, with a year-on-year increase of + 38 yuan / ton, – 137 yuan / ton, – 422 yuan / ton and – 197 yuan / ton respectively, and a month-on-month increase of – 175 yuan / ton, – 315 yuan / ton, – 338 yuan / ton and – 351 yuan / ton respectively. The sharp rise of oil price in Q1 of 22 years narrowed the price difference of polyester. The average prices of PTA, MEG and PX of the company’s main raw materials in the first quarter of 22 years were + 36%, – 0.6% and + 41% year-on-year respectively; In Q1 of the 22nd year, the sales volume of polyester and PTA products of the company also declined, and the sales volume of POY, FDY, DTY and PTA were – 17%, – 8%, – 1% and – 66% month on month respectively. Polyester price difference narrowed, superimposed with sales decline, causing Q1 performance to fall under pressure.
The production capacity has been steadily expanded, and the growth of the company can be expected: in recent years, the annual output of the company’s polyester filament has steadily ranked among the top three in China’s civil polyester filament industry. As of Q1 of 22, the company has an annual production capacity of 6 million tons of civil polyester filament, Shanghai Pudong Development Bank Co.Ltd(600000) tons of polyester staple fiber and pta5 million tons of Dushan energy base. Focusing on the “two continents and two lakes” base and the “two 10 million tons” (ten million tons of PTA and ten million tons of polyester) “14th five year plan goal, the company made steady progress: in November 2021, Zhonglei chemical fiber phase I polyester staple fiber project with an annual output of 300000 tons was officially put into operation, marking the company’s horizontal development of product categories and entering the staple fiber field for the first time. The company has sufficient projects under construction: in January 22, the third phase PTA project of Dushan energy started. After it is put into operation, it will realize the self-sufficiency of PTA raw materials and further reduce PTA costs; Dushan energy has an annual output of 4 million tons of PTA and 2.1 million tons of differentiated functional fibers (of which Shanghai Pudong Development Bank Co.Ltd(600000) tons and 300000 tons of functional differentiated fibers were put into operation in July 21 and February 22 respectively), Zhongyou chemical fiber has an annual output of 2 million tons of functional flexible customized staple fibers, 1 million tons of functional differentiated fibers and 300000 tons of polyester film new materials, and Xinyi base has an annual output of 2.7 million tons of differentiated fibers. The company comprehensively promotes the strategic layout of polyester industry and provides long-term growth momentum for the company.
Profit forecast, valuation and rating: considering the sharp rise of oil price in 22 years, the pressure on the cost side of the company and the decline of profitability, we lowered the company’s profit forecast for 20222023 and added the profit forecast for 2024. It is estimated that the company’s net profit from 20222024 will be 22.67 (31%) / 33.08 (10%) / 4.067 billion yuan respectively, and the corresponding EPS will be 1.48/2.16/2.66 yuan / share respectively. The company’s projects under construction are advancing in an orderly manner with sufficient growth momentum. We are still optimistic about the company’s future development, so we maintain the “buy” rating.
Risk warning: the new production capacity is less than the expected risk; Risk of sharp rise in raw material prices; Downstream demand recovery is less than expected risk.
