Wanhua Chemical (600309): Performance in line with expectations 19Q1 MDI prices continue to rebound
Investment highlights: The company released the 2018 annual results report: internal operating income of 606.
2.1 billion (+14 compared to the same period last year).
1%), net profit attributable to mother 106.
10,000 yuan (-4% year-on-year.
7%), of which the fourth quarter operating income was 146.
9.8 billion (+3 year-on-year.
8%, quarterly average -7.
4%), net profit attributable to mother 15.
8.9 billion yuan (-5南京夜网论坛2.
2% quarter to quarter -23.
3%), the performance was in line with expectations.
The scale of the report increased due to the consolidation of the sales scale of each business segment. However, as the market prices of polyurethane segment products began to fall in the second half of the year, the operating results slightly shifted.
The company has completed the absorption merger with Wanhua Chemical. According to the company’s calculation of the absorption merger, the operating income in 2018 was 728.
3.7 billion (+12 year-on-year.
3%), net profit attributable to mother 155.
6.6 billion (YoY -1.
In the fourth quarter, MDI prices accelerated to decline, resulting in a year-on-year increase in performance.
At present, MDI products are still the company’s main source of revenue and profits, and 北京保健按摩 performance is transmitted by the impact of market price fluctuations.
The MDI market reached a high point in September 2017. Since then, the supply side connected to major global manufacturers has gradually resumed and the supply has increased. The demand side has been affected by the economic growth rate and the downstream demand has been sluggish.
2018Q1-Q4 aggregate MDI average price is about 2.
26 million US dollars, the average average price is about 31% above the initial level, Q4 average price change replaced about 57%, compared with the chain replacement of about 33%; 2018Q1-Q4 pure MDI average price of about 3 respectively.
18, the average average price decreased by about 3%, the average price of Q4 replaced about 26%, compared with about 22%.
Affected by the sharp increase in the prices of MDI products, the company’s profitability continued to improve, and Q4 exceeded the chain length.
Manufacturers started with a limited supply at a low start, the margin of demand improved after the holiday, and MDI prices continued to rebound.
In mid-December 2018, the aggregate MDI dropped to about 1.
The bottom range of 10,000, but many buyers in the market continue to be bearish. Therefore, there is no large-scale stocking. The industry has a low season and low prices, and many manufacturers have overhauled the equipment.Downstream inventory average.
After the holiday, manufacturers maintained an increase of about 60% of the operating rate, and limited supply, resulting in tight market supply, and MDI prices gradually increased.
It is expected that the weather is gradually warming, downstream demand is gradually recovering, and the demand side margin is improving. It is optimistic that MDI prices will continue to rebound.
According to the company’s latest listing price in March, the aggregate MDI (direct sales) listing price1.
550,000 yuan, an increase of 2,000 yuan over the previous two months, and the pure MDI listing price is 2.
470,000 yuan, an increase of 1,000 yuan from the previous February. The group’s asset absorption, merger, and reorganization were completed to avoid peer competition and to obey the interest mechanism.
The company was absorbed into the predictor 522 of 100% equity interest of the merger party Wanhua Chemical.
10,000 yuan, the issue price of 30.
43 yuan / share, the actual number of new shares is 4.
0.6 billion shares.
The merger will include 100% equity of BC, 100% equity of BC Chenfeng, and Wanhua Ningbo 25.
5% equity, 8% equity of Wanhua Chlor-Alkali Thermoelectricity was injected into the listed company to achieve the overall listing, and 100% equity of the main asset BC company was committed to 3 in 2018-2021.
9.2 billion euros, Wanhua Ningbo 25.
The 5% equity commitment for 2018-2021 is 13.
After the transaction is completed, Zhongcheng Investment and Zhongkaixin will act in concert with Guofeng Investment. Guofeng Investment and its concerted parties will collectively hold listed companies.
72% equity, the actual controller of the listed company is still Yantai SASAC.
Zhongcheng Investment and Zhongkaixin are employee shareholding platforms, holding a total of 20 shares.
Jointly holding listed companies to avoid peer competition between the group and listed companies, smooth future interest mechanisms, and promote the growth of leaders and the company.
A global leader in MDI with production capacity, technology and cost advantages, petrochemical and new materials businesses support long-term development.
After the company completed the injection of minority shareholders’ equity assets in Columbia, California and Ningbo Wanhua, MDI production capacity reached 210 tons, ranking first in the world.
The company has rich technical reserves and breakthroughs in research and development. Its sixth-generation MDI technology developed by itself will achieve short-term capacity expansion and increase domestic production capacity through technological transformation.
At the same time, the company has accelerated the pace of overseas expansion and will build 40 production capacity in the United States.
In addition, with 30 tons of TDI plus 25 tons of BC, the total TDI production capacity reaches 55 tons.
Petrochemical business company’s ethylene project has a total investment of about 17.8 billion U.S. dollars. The main equipment includes 100 tons / year ethylene cracker, 40 tons / year polyvinyl chloride, 15 tons / year epoxy resin, 45 tons / year LLDPE, 30/65 expect/ Year PO / SM device, 5 expected / year butadiene device; new materials business PC, PMMA, MMA, etc. have been put into production.
New petrochemical and new material projects have been put into production one after another, supporting long-term development in the future.
Investment suggestion: Maintain the “overweight” rating and raise the 18-year profit forecast to 106 according to the performance report.
1 ppm (original value 105.
3) Temporarily maintain the profit forecast for 2019-20, and it is estimated that the net profit attributable to the mother will be 111 in 2019-20.
2 trillion, corresponding to EPS 3.
43 yuan, PE 12X, 12X, 9X.
Risk reminder: MDI and petrochemical industry chain boom decline; new business expansion is less than expected