Donghua Energy (002221) Dynamic Comment: The first quarterly report has seen a big increase in the first half of the year and the gradual performance is expected to grow steadily
Event: The company released the 2018 annual performance report, and achieved 489 operating income in 2018.
22 ppm, an increase of 49 in ten years.
71%; net profit attributable to mother 10.
83 ppm, an increase of ten years.
89%; basic profit income is 0.
6610 yuan / share, an increase of 0 in ten years.
The main reason for the company’s revenue growth is that LPG sales have increased by 30%, and the average sales price has increased by about 20%; the sales volume of chemical products has increased by about 19%, while the average sales price has increased by 14%.
In Q4 2018, operating income was 144.
30 ppm, an increase of 54 in ten years.
48%, an increase of 8 from the previous month.
79%; net profit attributable to mother 1.
80 ppm, a decrease of 27 per year.
42%, down 13 from the previous month.
In addition, the company released the 2019 Q1 performance forecast, which is expected to achieve net profit attributable to mothers3.
USD 1.3 billion, an annual increase of 0% -50%, and a monthly increase of 90% -185%.
Key points of investment: The company is based on liquefied petroleum gas (LPG) trade, storage, transportation and sales, and extends to PDH and polypropylene (PP).
The company focuses on LPG trade, sales and deep processing, relying on the four major production and storage bases in Zhangjiagang, Taicang, Ningbo and Qinzhou to become 成都桑拿网 the largest LPG importer and distributor in China.
Company Zhangjiagang New Materials and Ningbo New Materials two alkane resource comprehensive utilization projects have a PDH capacity of 126 tons / year and a PP capacity of 80 tons / year. In addition, the second and third phases of the Ningbo project are under construction, including a 66 tons / year PDHInstallation and two 40 nominal / year PP installations.
The company has formed an LPG “trade + finance + storage and transportation + deep processing” model. The company’s chemical product revenue and gross profit share have continued to increase, and its overall gross profit rate has continued to increase.
In the next few years, the company will continue to expand and strengthen PDH and PP. Each year, the investment scale of about 20 billion US dollars in Lianyungang Xujing New District alkane resource deep processing industrial base will gradually advance in an orderly manner, which will pave the way for the company’s future performance increase.
The Sino-US trade war has released a signal of easing, and imports of LPG and light hydrocarbon resources may usher in a turnaround.
Globally, LPG has surpluses in North America and the Middle East, and Asia Pacific funding is sought.
Global LPG supply and demand maintain stable growth. The two major resource centers of the United States and the Middle East are the main LPG export destinations. Consumption is mainly driven by emerging economies.
Domestic LPG’s external dependence is over 30%, and the proportion of industrial uses has increased.
Annual LPG production, imports and apparent consumption in 2018 reached 3800 titles, 1841 titles and 5528 titles, 2011?
The average annual composite composition in 2018 was 8 respectively.
25% and 12.
63% of foreign dependence from 9 in 2011.
31% rose to 31 in 2018.
25% of the main imports depend on the UAE, the United States and Qatar.
The rapid development of PDH has driven the consumption of LPG in the chemical industry. It is expected that by 2020, China ‘s domestic and industrial LPG consumption will account for about 55% and 38% respectively, which is expected to further drive LPG consumption.
Global ethylene and propylene supply and demand have steadily increased, and PDH and additional split ethylene have good prospects.
In 2016, the world’s total ethylene production capacity reached approximately 1.
6.2 billion tons / year, the average global start to replace 89.
6%, higher than 85% of the previous year, the demand is about 1.
5.3 billion tons.
It is expected that ethylene production capacity and consumption will be 2 in 2025.
2.7 billion tons / year and 1.
9.9 billion tons in 2016?
In 2025, the average annual production capacity and consumption of composite oxides will be 3.
8% and 3.
Global starch production capacity in 2015 was approximately 1.
2.3 billion tons / year, the consumption is about 9606 plans, and it is estimated that the production capacity and consumption will reach 1 by 2020.
5.4 billion tons / year and 1.
2 billion tons in 2015?
The compound annual growth rates of millimeter capacity and demand in 2020 will be 4 respectively.
6% and 4.
Looking at the global ethylene and propylene routes, the effect of shale oil and gas in North America has replaced the bias of supply and demand. The light hydrocarbon roadmap has better economic benefits and the proportion of light hydrocarbon systems has increased.
In addition, international crude oil prices have bottomed out to the middle oil price range since the end of 2018, PDH earnings have stabilized, and their competitive advantage has continued to increase.
Profit forecast and investment rating: The company ‘s Yangtze River Petrochemical project and Ningbo Fuji project are operating stably. After the new project is completed and put into operation, the company has a total of 3 PDH units with a total capacity of 192 tons / year, a total of 4 PP units and a total capacity of 160 locations / yearBy then, the PDH and PP devices will be completely matched.
Considering the progress of new projects and the uncertainty of the Sino-US trade war, we expect 2018?
The net profit attributable to the parent company will be 10 in 2020.
$ 3.3 billion, with budgeted returns of zero.
29 yuan, maintain BUY rating.
Risk warning: New project construction is less than expected, North American shale oil and gas production is less than expected, changes in raw material and product prices, LPG trade risks, and uncertain risks in the Sino-US trade war.