Hengli Petrochemical (600346): Cash flow continues to improve, and PTA and ethylene projects continue to grow rapidly

Hengli Petrochemical (600346): Cash flow continues to improve, and PTA and ethylene projects continue to grow rapidly

Event: The company released the third quarter report of 2019, and achieved operating income of 763 in the first three quarters.

29 trillion, +74 for ten years.

14%; net profit attributable to mother 68.

1.7 billion, +86 a year.

64%.

Among them, Q3 2019 single quarter realized operating income of 339.

96 trillion, ten years +95.

61%, +24.

62%; net profit attributable to mother 27.

96 trillion, ten years +57.

96%, compared to -20.

46%.

EPS0 for the first three quarters.

98 yuan.

  Main points: 1.

The large-scale refining and chemical project was put into operation, and the cash flow improved significantly. On May 17, 2019, the company’s 2000 annual budget / year large-scale refining and chemical project of the company was formally put into full production. It has now been consolidated and the company’s fixed assets have risen to 82 billion yuan.

The output and sales volume of the project were 479 for chemicals.

3 Announcements / 478.

41 average, refined oil 171.

91 Statutory / 170.

79 ounces.

  Taking the total product volume of 378 in the third quarter to exclude measurement (excluding PX and acetic acid for own use), the Q3 of this project is running at full capacity in a single quarter.

For Q1-Q3 2019, the company’s net cash flows from operating activities were -38.

05 billion, 161.

8 billion, 142.

4.8 billion.

It can be seen that after the refining and petrochemical projects are put into production, the company’s cash flow has improved significantly.

However, due to the company’s multiple projects under construction, it is still in a period of intensive capital expenditure and the asset-liability ratio is as high as 80.

74%.

  In the first three quarters of 2019, the company reorganized PTA, and the production and sales of polyester business were basically stable. Among them, polyester sales increased and PTA decreased.

In terms of price, polyester filament (-9% for civilian use and -17 for industry).

63%), polyester chips (-10.

9%), engineering plastics and polyester film (-15.

09%), PTA (-1.

31%) The average price of products shifted to varying degrees.

At present, the market is too pessimistic about downstream demand, but according to our calculations, from January to August 2019, upstream polyester filaments gradually gained 1996 instead of +13.

5%; gradually export 179.

74 Initially, at least +15.3%; gradually net exports 172.

660,000, ten years +17.

03%; apparent consumption is 1824 per year, an increase of 13 per year.

2%.

  2.

The PTA and ethylene projects are expected to be put into production at the end of 19 and early 20s. (1) The 重慶耍耍網 company is constructing a 150-ton / year ethylene project, including a 150-ton ethylene unit and supporting 12 sets of chemical units, to further increase the added value of products and the competitiveness of refining.

The project is expected to be delivered in the fourth quarter of 2019, and will be fully operational at the end of 2019 or early 2020.

  According to the project feasibility study report, after the project is fully operational, it is expected to achieve annual sales income of 24.3 billion yuan and an average annual net profit of approximately 4.3 billion yuan.

(2) The 250 budget / year PTA-4 project is under construction and is expected to be commissioned for production in the fourth quarter of 2019.

According to the feasibility study report, after the project has reached production and efficiency, it is estimated that the average annual sales income will be 112.573 million yuan and the annual average total profit will be 906.98 million yuan.

At the same time, there are 250 PTTA-5 projects expected to be completed in mid-2020, when the company’s total PTA production capacity will reach 1160 years / year.

(3) A 135-ton high-performance multi-functional high-quality new textile material project is under construction.

It is estimated that the annual sales income is expected to be 156 after the project is fully in production.

60,000 yuan (including tax), the total annual profit is 2,661.8 million yuan, and the profit after tax is 1,999.63 million yuan.

  3.

Earnings forecast and rating We estimate that the company’s net profit attributable to its parent for 2019-2021 will be 91.

8.3 billion, 117.

48 ppm and 145.

490,000 yuan, corresponding to EPS 1.

30 yuan, 1.

67 yuan and 2.

07 yuan, PE 12.

5X, 9.

8X and 7.

9X.

Considering that the company’s large-scale refining and chemical projects are in production and entering the harvesting period, at the same time, it is accelerating the improvement of the integrated development of the entire industrial chain and increasing the added value.

  Risk warning: macroeconomic fluctuations, rising product prices, and project commissioning progress is less than expected.