Tongkun (601233) 2019 performance preview comment: the company’s profit is stable under the weak economic climate, and Zhejiang Petrochemical has put into full production and contributed to the increase in performance

Tongkun (601233) 2019 performance preview comment: the company’s profit is stable under the weak economic climate, and Zhejiang Petrochemical has put into full production and contributed to the increase in performance

Matters: The company released the 2019 performance forecast: It is estimated that the net profit attributable to mothers in 2019 will be 2.8 billion to 3 billion, an increase of 12.

1% -41.

5%; net profit after deduction is 26.

8-29.

30,000 yuan, an increase of 29 in ten years.

5% -41.

6%; of which, the net profit attributable to the mother in the fourth quarter was 3.

49-5.

490,000 yuan (in the third quarter of 2018, net profit attributable to the mother was -3.

8.3 billion).

Comment: The Q4 industry has maximized efficiency and the company’s performance is in line with expectations.

In the fourth quarter 天津夜网 of 2019, demand for new raw material production capacity was expected to weaken, industry sentiment shifted, prices of polyester products, and spreads fell.

According to the data we track: the price of regular conventional varieties POY / FDY / DTY in 2019 is 6999/7353/8394 yuan / ton, which becomes -1457 / -1402 // 1429 yuan / ton; the price difference is 1229/1584/2624 yuan /Ton, -200 / -145 / -172 yuan / ton.

The price of regular varieties POY / FDY / DTY in 2019Q4 is 6257/6389/7664 yuan / ton, -770 / -683 / -541 yuan / ton; the spread is 1121/1252/2528 yuan / ton, -353 / -266 /-124 yuan / ton.

Under the weak economic cycle, the industry leader has obvious scale advantages, the company’s industry leader level is stable, increased production capacity is gradually put into operation, and the polyester filament yarn 南京夜网 profit remains stable.

The cost of polyester is loose, and the profit of filament is expected to be maintained.

In 2020, polyester raw materials PX, PTA, and MEG will enter an expansion cycle. The cost-side supply margin will be loose. Polyester filaments will benefit from falling raw material prices and their own supply and demand will be relatively good. Profitability will be maintained.

According to our statistics, polyester filament production capacity will increase by about 225 tons in 2020, which will gradually increase5.

5%, the supply and demand growth basically matched, and does not rule out the delay of some devices in combination with the market to put it into operation; supplementary production capacity is mainly concentrated in industry leaders such as Tongkun, Xinfengming, Hengyi, the current direct spinning CR6 as high as 60%, in the futureIndustry concentration has further increased.

The company’s current polyester filament production capacity is 690 tons, and domestic cities account for nearly 17%. In the future, it will continue to improve its production capacity layout and consolidate its leading position. The company’s new projects are steadily advancing. Hengchao Chemical Fiber 50 to intelligent super simulation fiber projects are expected in the second half of 2020Initially put into operation, Yangkou Port petrochemical polyester integration project has begun construction.

The full-scale production of the first phase project of Zhejiang Petrochemical will become an important performance increase of the company.

The first phase of the project of Zhejiang Petrochemical will be operated in May 2019. At the end of 2019, the refinery, aromatics, ethylene and downstream chemical installations will be put into trial operation.Achieve stable operation and produce qualified products.

The company holds a 20% stake in Zhejiang Petrochemical. The commissioning of the Zhejiang Petrochemical project helps the company integrate the integrated industrial chain layout and enhance the company’s profitability.

Earnings forecasts, estimates and investment ratings.

The benefits of polyester filaments are relatively controllable. Zhejiang Petrochemical has been in full production and contributed to the increase in performance. The company’s cash flow and profitability are good. Based on the company’s performance forecast, the profit forecast for 2019 is slightly adjusted.Degree profit 29.

5/37.

5/44.

5 trillion (the original forecast was 30.

3/36.

2/40.

600 million), EPS 1.

59/2.

03/2.

41 yuan, PE is 9/7/6 times.

Based on the industry assessment level, 9 times PE is given in 2020, and the target price is raised to 18.

3 yuan; the current company is estimated to be at a low level, Zhejiang Petrochemical put into operation to bring more obvious investment income for the company, maintain a “strong push” rating.

Risk warning: Crude oil prices fluctuate sharply, demand is less than expected, and project construction is less than expected.