Hualu Hengsheng (600426): The price of acetic acid and urea increased sharply

Event: The company achieved revenue of 143 in 2018.

60,000 yuan, an increase of 37 in ten years.

9%, realizing net profit attributable to mother 30.

2 ‰, an increase of 147 in ten years.


The growth of performance benefited mainly from urea, and the price of acetic acid increased significantly.

The company’s gross profit margin for sales in 2018 was 30.

5%, a significant increase of 10 from 2017.

8 units.

In 2018, the company’s fertilizer business sales were 186.

In July, it increased by 22 per year.

5%, to achieve 47 years of income growth of 47.

8%, gross margin growth rate increased significantly by 15.

1 up to 28.

0%, our data monitoring shows that the average urea price in Shandong area is 1998 yuan / ton, an increase of more than 20.

9%. According to our calculations, the industry’s average gross profit has increased by about 149 over last year.

2%, the company’s fertilizer (urea) business realized volume and price increases in 2018.

At the same time, the company’s acetic acid business revenue increased by 49 in 2018.

0%, gross margin increased significantly by 24.

3 up to 54.

5%, affected by the continuous improvement of the industry’s supply and demand pattern and the growth of export growth, the price of acetic acid increased in 2018. According to our data monitoring, the average price of acetic acid in Shandong in 2018 was 4,571 yuan / ton, an increase of 49.

2%, the acetic acid-methanol spread increased by 88 compared with 2017.

7%, so the increase in the price of urea and acetic acid and the increase in urea production are the most preliminary growth of the company’s performance in 2018.

In addition, the company’s 50 dialysis plasma project was put into production in the fourth quarter, which further strengthened the company’s performance.

Invested in the construction of amide, nylon new materials and refined adipic acid quality improvement projects, opening 武汉夜网论坛 up future development space.

The company announced that it will rely on the company’s existing gasification platform, make full use of syngas resources, and combine the company’s existing raw materials such as methanol and ammonia, steam, power and other energy advantages to develop cyclohexanone-caprolactam-nylon 6 (polyamide)Slicing industry chain. After the project is completed and put into production, it can produce 30 caprolactam inserts (of which 20 are inserted for own use), toluene 20 fragments, nylon 6 slices 20 inserts, 48 tons of ammonium sulfate, etc., and it is expected to achieve an average annual operating income of 56.

100 million, total profit 4.

500 million, will further expand the company’s industrial chain and optimize product structure.

Since 2017, the demand for downstream nylon (nylon) chips has been increasing, and the prosperity of the domestic caprolactam industry has continued to increase. According to our data monitoring, the average gross profit of the industry in 2018 is above 3600 yuan / ton, and the products are profitable.

At the same time, the company merged and implemented a refined adipic acid quality improvement project, using advanced and mature production technology to build16.

The 66 / year adipic acid production unit and the cyclohexanol unit are equipped to improve the efficiency of the scale while achieving high-end products. After the project is completed and put into production, it is expected to achieve an average annual operating income.

9 ppm, total profit 2.

900 million, will further improve corporate profitability.

The cholesterol project is put into production, and an important future performance increase.

The company’s annual output of 50 tons of dialysis blood glucose project was put into operation in the fourth quarter of last year and maintained high-load operation.

At present, about 60% of domestic cholesterol still needs to be imported. In 2018, the import scale reached 980 tons. In the future, the apparent domestic consumption of continuous downstream polyester production capacity will continue to grow steadily, and the domestic food market demand will grow steadily.
Since 2019, the domestic cholesterol price has declined, and the average price in East China is 5098 yuan / ton, which has gradually decreased by 33.

6%. In the future, the domestic cholesterol process will face fierce cost competition. Based on the additional production costs of the company’s coal-to-gypsum process, we are optimistic about the future cost and quality competitive advantages of the company’s cholesterol in the market. Earnings forecasts and investment advice.

We expect the company’s EPS for 2019-2021 to be 1.

55 yuan, 1.

68 yuan, 1.

76 yuan, corresponding PE is 10X, 9X and 9X respectively, and maintain the “Buy” rating.

Risk warning: the risk of a significant decline in urea prices; the risk of a significant decline in the price of acetic acid; the risk of new projects being put into production or less than expected.