\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 409 Tangshan Sanyou Chemical Industries Co.Ltd(600409) )
Key investment points
Differentiation is obvious, and the decline of viscose profit dragged down Q1 performance
The price increment of the company in the first quarter decreased. According to the announcement, the sales volume of soda ash / viscose / caustic soda / PVC / DMC in the first quarter decreased by 7.8% / 16.97% / 3.54% / 24.8% / 34.3% year-on-year respectively. The sales volume of caustic soda decreased relatively, which was mainly affected by the adjustment of the epidemic situation and the profit structure of the company; The selling price increased by 70% / 4.93% / 119.34% / – 13.78% / 35.97% respectively year-on-year. The product profit differentiation is obvious. We calculate that the price difference of soda ash and DMC of the company has significantly expanded year-on-year, while the price difference of viscose staple fiber and chlor alkali has narrowed year-on-year. In particular, the price difference between viscose staple fiber and pulp and caustic soda has decreased by more than 1700 yuan / ton year-on-year, which is the main reason for the decline of Q1 performance of the company. Affected by the decline of raw material cost and sales volume, the company’s Q1 comprehensive gross profit margin was 16.91%, a year-on-year decrease of 7pct and a month on month decrease of 0.98pct. The expenses of the company remained stable during the period, with a net interest rate of 5.07%, a year-on-year decrease of 5.78pct and a month on month increase of 1.47pct. The company operated steadily, with an asset liability ratio of 47.41%, a year-on-year decrease of 1.6pct. In the first quarter, the net operating cash flow was 1.257 billion and the cash on hand was 4.236 billion, a year-on-year increase of 37.4%.
Soda ash maintains a high boom and viscose profit is expected to improve
According to the data of Baichuan Yingfu, the current market prices of heavy soda ash and viscose staple fiber are 2850 yuan / ton and 14200 yuan / ton respectively. According to the current price, the gross profit per ton of soda ash exceeds 1000 yuan. With the production capacity of photovoltaic glass and the recovery of demand for chemical alumina, it is expected that the profitability of soda ash Q2 is expected to be further improved. Affected by covid-19 epidemic, textile demand continued to be low. The price of raw materials rose, and the viscose staple fiber industry still suffered losses. Considering the historical high price difference of 8000 yuan / ton between viscose and cotton and the low stock of viscose staple fiber in recent five years for 13.7 days, we believe that after the Q2 epidemic is controlled, the recovery of textile demand is expected to drive the recovery of viscose profits. The company’s Q2 Profit is expected to continue to improve month on month. The company is the double leader of soda ash and viscose staple fiber in China, with obvious cost advantage and stable leading position. For every 100 yuan / ton increase of soda ash and viscose, the annual net profit of the company will increase by 214 million and 60 million respectively, with great performance flexibility.
Release the industrial plan of “three chain group” to open up the future growth space
Relying on its own advantages, the company plans to invest 57 billion yuan to build a “three chain group” industrial layout. Among them, 550000 tons of caustic soda and downstream deep processing, 300000 tons of Lyocell fiber, 400000 tons of silicone, 4gw photovoltaic power generation, 150000 tons / day seawater desalination and other projects are planned. We believe that with the above planning projects put into operation, the company’s industrial chain will be further extended, the industry status and competitiveness will be further enhanced, and the company’s future growth space will be opened.
Profit forecast and valuation
It is estimated that the company’s EPS from 2022 to 2024 will be 1.08/1.29/1.42 yuan respectively, and the current price corresponding to PE will be 6.08/5.09/4.62 times respectively. The company is a double leader in soda ash and viscose, with obvious cost advantages. Capacity expansion opens up future growth space and maintains the “buy” rating.
Risk tips
The prices of raw materials and products fluctuate greatly; The epidemic situation affects the production or export of the company; Safety and environmental protection policy risks, etc.
