Xinfengming (603225) Interim Review: Results of the first half of the year fell back in the first half of the year

Xinfengming (603225) Interim Review: Results of the first half of the year fell back in the first half of the year

Event: The company released its semi-annual report for 2019, reporting that a series of companies realized operating income of 163.

3 percent, an increase of 13.

34%, achieving net profit attributable to shareholders of listed companies.

8.8 billion, down 27 each year.

56%, realizing net profit after deductions attributable to shareholders of listed companies5.

1.4 billion, down 34 every year.

11%, achieving EPS 0.

49 yuan; of which Q2 realized operating income of 86.

7 ppm, flat every year, achieving net profit3.

2.1 billion, down 41 a year.

5%.

Comments: 1. The decline in polyester filament boom and decline in H1 performance The company’s polyester filament production and sales performed well in the first half of the year. The newly-launched Zhongshi Phase II and Zhongxin Phase II projects started to contribute incremental growth in the first half of the year.For 182.

56 Gazette and 185.

In 1984, the annual growth rate was 29.

9% and 34.

3%.

However, due to the industry’s economic situation and fluctuations in raw material prices, the level of filament profitability has shifted significantly.

According to the price difference data we monitor, the average price differences of 19Q2 filament POY, FDY, DTY, and bottle flakes were 1151 yuan / ton, 1509 yuan / ton, 2484 yuan / ton, and 679 yuan / ton, respectively, which increased by 8 compared with Q1.
.

6%, -13.

5%, -5.

8% and -24%.

In terms of price trends, the price of filament in the first four months of this year was basically stable. Since May, the center of gravity of the upstream raw materials has rapidly decreased, and it has started to rise significantly in mid-June, but the monthly average price has still dropped significantly.

In terms of raw materials, the overall performance of PTA was relatively high in the first half of the year, and it clearly fell behind in May. With the rebound in crude oil prices and the concentration of maintenance in June, the increase exceeded the simultaneous increase of filament.

As the company’s raw material PTA mainly relies on external procurement, its profitability is partly eroded by PTA.

In the first half of the year, the company’s gross profit margins for POY / FDY / DTY products were 7 respectively.

4%, 11.

5% and 10.

9%, the level of the first half of 18 a year is obviously above the local level.

However, the company is vigorously promoting the construction of Dushan Energy’s 500-ton PTA project. By then, the company’s ability to resist fluctuations in raw material prices will be significantly enhanced.

2. The fundraising and investment project is progressing smoothly, the PTA project is about to be put into production, and the performance has ushered in new growth. Until the first half of the year, the company’s polyester filament production capacity has reached 370 tons.

In July, the first phase of Zhongyue Chemical Fiber was started at 深圳桑拿网 30 o’clock, and the second phase project is also expected to be put into production within the scheduled year; the progress of 26 DTY of China Stone Technology is slightly delayed, and it is expected that the texturing equipment will be fully in place by the end of the year;It will be put into production in the first quarter of 2020. By the end of 2020, the company’s filament production capacity is expected to exceed more than 500 mark.

In terms of raw materials, the company’s first phase of the 500-ton PTA project at Dushan Energy has entered the trial run stage, and is currently progressing smoothly. It is expected to start production at the end of September, and the second-phase project is also under active construction. According to the data disclosed by the interim report, the progress of the remaining 6 months has been completed. 12It is expected to be officially put into production in the third quarter of next year.

The company’s non-public issuance of shares has been reviewed and approved by the CSRC, and the company will replace the initial investment funds after the issuance is completed.

3. The pattern of the polyester filament industry is centralized, and the leading trend is obvious. The company is one of the leading domestic polyester filament companies. The product differentiation rate is high, and the production and sales remain strong.

Most of the company’s melt-spun polyester production lines have been put into operation in 10 years. The equipment has obvious advantages in late development. Production efficiency, operational stability and material consumption have always been at an advantage. At the same time, it has also been translated into product cost advantages.

In the first half of this year, domestic polyester filament production was relatively small, and the second half of this year will enter a period of concentrated production.

However, from the perspective of new production projects, it is mainly the participation of industry leaders that will continue to increase the concentration of the industry.
Constrained by the supply side of spinning equipment, the industry’s annual increase in production capacity of the package, there will basically be no short-term disorderly replenishment of production capacity, compared to the raw material side, the next 1-2 years, the competition pattern of filament is relatively better.
Investment suggestion: Assuming that the investment projects are put into production on schedule, we expect the company to achieve net profit attributable to shareholders of listed companies of 13 to 19-19.

5 billion, 20.

600 million and 22.

5 ppm, EPS (additional dilution is not considered for the time being) 1.

14 yuan, 1.

73 yuan and 1.

89 yuan, the current price corresponds to 19 times PE only 10 times, continue to strongly recommend.

Risk warning: The progress of projects under construction is less than expected, and international oil prices have changed significantly.