\u3000\u3 Shengda Resources Co.Ltd(000603) 225 Xinfengming Group Co.Ltd(603225) )
Event:
On April 28, Xinfengming Group Co.Ltd(603225) released the first quarterly report of 2022: in the first quarter of 2022, the company achieved an operating revenue of 10.602 billion yuan, a year-on-year decrease of 1.98% and a month on month increase of 29.28%; The net profit attributable to the shareholders of the listed company was 285 million yuan, a year-on-year decrease of 42.75% and a month on month decrease of 10.92%; The gross profit margin reached 8.46%, down 0.95 percentage points year-on-year and 2.33 percentage points month on month; The net interest rate reached 2.69%, down 1.91 percentage points year-on-year and 1.21 percentage points month on month.
Key investment points:
The company’s Q1 performance is under pressure due to the superposition of rising costs and the impact of the epidemic
Since 2022, affected by geographical conflicts and other factors, the international crude oil price has increased significantly, driving the increase of the price of raw materials in the upstream of polyester. In Q1 2022, the average purchase price of PX including tax of the company reached 696547 yuan / ton, a year-on-year increase of 41.17%. The rising cost of raw materials also squeezed the company’s profits. In 2022, Q1 company realized a net profit attributable to the parent company of 285 million yuan, a year-on-year decrease of 42.75% and a month on month decrease of 10.92%; The gross profit margin reached 8.46%, down 0.95 percentage points year-on-year and 2.33 percentage points month on month.
At the same time, affected by the epidemic, compared with Q4 in 2021, the sales volume of main products decreased to a certain extent. In 2022, q1poy achieved a revenue of 6.150 billion yuan, a month on month ratio of – 15.52%, and the sales volume was 884100 tons, a month on month ratio of – 16.93%; FDY achieved a revenue of 1.618 billion yuan, a month on month ratio of – 4.64%, and a sales volume of 213800 tons, a month on month ratio of – 7.88%; DTY achieved a revenue of 1.05 billion yuan, a month on month ratio of – 3.38%, and a sales volume of 117800 tons, a month on month ratio of – 0.51%; PTA achieved a revenue of 465 million yuan, a month on month ratio of – 62.02%, and a sales volume of 95300 tons, a month on month ratio of – 66.25%. From the perspective of revenue of main products, Q1 showed a downward trend in 2022, and the company’s total revenue still maintained growth, mainly due to the negative revenue of other businesses of Q4 company in 2021.
In terms of period expense ratio, the company’s sales / management / financial expense ratio in 2022 and Q1 was 0.16% / 3.32% / 1.38% respectively, with a year-on-year ratio of -0.01 / + 0.77 / + 0.41pct and a month on month ratio of -0.08 / – 1.46 / – 0.24pct; Meanwhile, in 2022, the net cash flow from Q1’s operating activities reached -2.008 billion yuan, a year-on-year decrease of 243.08%, mainly due to the increase in cash paid by the company for purchasing goods and receiving labor services, as well as various taxes paid during the reporting period.
Polyester filament has short-term pressure and is optimistic about medium and long-term development
Affected by the rising price of raw materials in the upstream, the sluggish operation in the downstream and the decline in demand under the background of the epidemic, polyester filament is under pressure in the short term. In 2022q1, the average market price of POY reaches 7978.0 yuan / ton, with a year-on-year increase of + 16.63% and a month on month increase of + 1.27%; The price difference reached 139172 yuan / ton, with a year-on-year increase of -10.83% and a month on month increase of -20.79%. The average market price of FDY reached 814972 yuan / ton, with a year-on-year increase of + 16.76% and a month on month increase of + 2.78%; The price difference reached 156344 yuan / ton, a year-on-year increase of -8.05% and a month on month increase of -13.52%. In the short term, with the gradual control of the epidemic and the resumption of work and production of downstream enterprises, the demand is expected to gradually pick up and the profitability of filaments is expected to be repaired. In the medium and long term, the filament production capacity is in an orderly expansion state, the industry concentration continues to improve, and the leading voice continues to increase; Meanwhile, in recent years, with the gradual improvement of coal chemical technology and the continuous operation of private refineries, the upstream production capacity of PX, PTA and ethylene glycol industries is released rapidly, and the supply of raw materials is relatively loose, which will be conducive to the transfer of industrial profits to the polyester end. We are optimistic that the polyester filament will maintain a long-term boom.
Polyester production capacity continued to be put into operation, and the leading position of the company was continuously consolidated
The company is a leading polyester filament enterprise in China. By the end of 2021, the company has a filament production capacity of 6 million tons, a market share of nearly 12%, and strong comprehensive strength. At the same time, the company actively expanded horizontally, and the Shanghai Pudong Development Bank Co.Ltd(600000) T / a polyester staple fiber production capacity was also put into operation in 2021. It entered the staple fiber field for the first time, and the polyester product structure was further improved. In order to further consolidate its leading position and expand its scale advantages, the company has actively expanded its production capacity. Dushan energy pcp03 unit has been put into operation in February 2022, and the supporting filament unit is expected to be fully produced in May, with a new increase of 300000 tons / year. At the same time, Dushan energy’s remaining 1.2 million T / a polyester filament production capacity and Xinyi 2.7 million T / a polyester new material integration project are also actively under construction. It is expected that by the end of 2022, the company will also invest 700000 T / a polyester filament production capacity and Shanghai Pudong Development Bank Co.Ltd(600000) T / A polyester staple production capacity. With the continuous launch of the company’s new production capacity, the company’s market position in the polyester field has been further improved, its scale and cost advantages have been continuously expanded, and its core competitiveness has been continuously enhanced.
The profit forecast and investment rating predict that the net profit attributable to the parent company in 2022, 2023 and 2024 will be RMB 2.187 billion, RMB 3.039 billion and RMB 3.924 billion respectively, and the EPS will be RMB 1.43, 1.99 and 2.57/share, corresponding to 7, 5 and 4 times of PE, maintaining the “buy” rating.
The implementation of risk warning policies, the construction progress of new production capacity is not up to expectations, the contribution performance of new production capacity is not up to expectations, the price of raw materials fluctuates, the change of environmental protection policies, the economy drops sharply, and the price of crude oil fluctuates sharply.
