Rongsheng Petrochemical (002493) 2019 Interim Report Review: CICC Petrochemical’s Profit Declines, Zhejiang Petrochemical Gradually Starts Production

Rongsheng Petrochemical (002493) 2019 Interim Report Review: CICC Petrochemical’s Profit Declines, Zhejiang Petrochemical Gradually Starts Production
Event: On August 10, 2019, the company released its semi-annual report for 2019: the first half of 2019 achieved revenue of 394.92 ppm, +5 for ten years.28%; Realize net profit attributable to mother 10.460,000 yuan, at least -8.66%; Estimated increase in average net asset income by 4.90%, decrease by 2 every year.81 units. In Q2 2019, it achieved revenue of 230 in a single quarter.31 ppm, +18 a year.68%, +39.91%; net profit attributable to mothers4.420,000 yuan, at least -13.47% month-on-month.01%; estimated average return on net assets increased by 2.05%, decrease by 1 every year.33 units. Comments: 1. The price spread of PX has declined, and the increase in costs has dragged down. The performance has basically met the expected net profit for the first half of 2019.4.6 billion, a decline of 8 per year.66%. Basically in line with expectations, expectations: (1) in the second quarter due to the release of Hengli Refinery’s PX capacity, the price spread of the PX market continued to decline in the second quarter; (2) sales expenses increased by 53.62%, mainly due to the increase in freight rates of subsidiaries Rongsheng (Singapore) and Yisheng Dahua; (3) R & D investment in projects increased by 29.27%. As for the price difference, the average price difference of PTA in 2019H1 is 1037 yuan / ton, +24 in ten years.37%, +6 from the previous quarter.31%.The average spread of polyester filament POY was 1,329 yuan / ton, up to -11.73%, compared to -16.14%; The average price difference of FDY is 1991 yuan / ton, which is +1 for many years.74%, +9 from the previous quarter.66%; the average spread of DTY is 3,047 yuan / ton, +10 for ten years.32%, -3.55%. In Q2 2019, the average price difference of PTA was 1,300 yuan / ton, +74 in ten years.05%, +68.30%.The average spread of polyester filament POY was 1423 yuan / ton, up to -17.42%, compared with 15.44%; FDY average price difference is 1891 yuan / ton, -13 for many years.23%, compared to -9.63%; the average spread of DTY is 3027 yuan / ton, for many years -9.16%, MoM-1.29%. 2. Zhejiang Petrochemical Project’s atmospheric and vacuum decompression and related public engineering installations have been put into operation. The most difficult time has passed. It is optimistic that Zhejiang Petrochemical will start contributing in the second half of 2019. Zhejiang Petrochemical is the company’s “crude oil-PX-PTA-polyester filament” layout of the entire industry chain. It plans to build a 4,000-ton / year integrated refining and chemical integration project (in two phases), each phase replacing 2000 / year refining, 400Lbs / year PX, 140 lbs / year ethylene, 26 PCs, National Six standard oil products, etc. On May 21, 2019, the 4000-ton / year refining and chemical integration project (Phase 1) has completed engineering construction, equipment installation and commissioningWaiting for the preliminary work, the relevant equipment has been put into operation, and the first batch of equipment (atmospheric decompression and related public engineering equipment, etc.) is running.Rongsheng Petrochemical has passed the most difficult moment and ushered in the dawn of victory.北京夜网 According to our calculations, the first stage (2000 / year) of Zhejiang Petrochemical Refining and Petrochemical Project has an 80% probability that the net profit per ton of crude oil processed will be 447-532 yuan / ton.The total net profit range is 89.4-106.4 trillion, the center is 97.900 million. 3. The size of PTA is better in 2019, and the price has increased. The release of PX’s production capacity has released the expansion of PTA profit. The PTA industry has experienced a downturn of more than 4 years. The production capacity has increased significantly.Move up.In 2018, the nominal capacity of the PTA industry was maintained at 5129 / the operating rate increased to 78.8%, the operating rate is expected to increase to 83% in 2020, the supply and demand pattern has improved significantly.The company’s participation in controlling PTA’s total production capacity is about 1,350 tons (28% of the country’s total production capacity), of which 595 shares of equity power generation, PTA spread increases by 100 yuan / ton (excluding tax), the company’s net profit will increase by 5.95 trillion, elastic toughness.And due to the continuous release of PX capacity of private refining and chemical industry, PX prices have expanded and the PTA spread has been extended, significantly improving performance. On July 17, 2019, the company announced that the company plans to increase its capital to Zhejiang Yisheng New Materials Co., Ltd. by 500 million yuan with its wholly-owned subsidiary Sinopec and Hengyi Petrochemical.After the capital increase was completed, the respective 50% capital contribution ratios of the two parties remained unchanged, and the registered capital of Yisheng New Materials was changed to 2 billion yuan. 4. Investment rating and estimation: It is estimated that the company’s net profit attributable to the parent in 2019/20/21 will be 27.97/68.96/88.51 ppm, PE is 26/11/8 times.Maintain the “Highly Recommended” rating. 5. Risk warning: The price of oil drops sharply; downstream demand is less than expected; the progress of Zhejiang Petrochemical project is not up to expectations.