Xinhecheng (002001): Performance in line with expected future VE, methionine price is expected to rebound at the bottom
Investment highlights: The company released the 2018 annual report and the 2019 first quarter report: in 2018, it achieved operating income of 86.
8.3 billion (+ 39% YoY).
3%), net profit attributable to mother 30.
7.9 billion (+ 80% YoY).
6%), net profit after deducting non-return to the mother 28.
8.9 billion (+ 75% year-on-year.
%), Of which 19 in the fourth quarter of 2018.
6.4 billion (YoY -8.
0%), net profit attributable to mother 5.
4.1 billion (-32 compared to the same period last year).
6% quarter-on-quarter +12.
9%), net profit after deduction is 4
6.6 billion (-40% YoY).
7%, quarterly +11.
Performance is in line with expectations.
The company plans to distribute a cash dividend of 7 for every 10 shares.
0 yuan (including tax).
The company achieved operating income of 18 in 2019Q1.
3.6 billion (-39.
7% in the second quarter-6.
5%), net profit attributable to mother 5.
110,000 yuan (-65 compared to the same period last year).
8% in the second quarter -5.
5%), net profit after deduction is 4
8.2 billion (-67.
5%, quarter-on-quarter +3.
4%), the performance was in line with expectations.
Vitamin A / E prices have experienced drastic changes, and the single-quarter performance since the second half of 2018 has stabilized with prices.
At the end of October 2017, BASF ‘s citral explosion caused the VA, VE, flavors and fragrances to be discontinued, and the market supply was in short supply.
The VA market price rose to 1,425 yuan / kg at the beginning of 2018, and the VE market price once rose to 125 yuan / kg.
With the gradual 武汉夜生活网 resumption of production of BASF at the end of the first quarter of 2018, the price of products dropped rapidly. In the second half of the year, VA prices basically changed around 400 yuan / kg, and VE prices fell to the bottom of about 40 yuan / kg.
Initially, the average price of VA / VE in 2018 was 701/59 yuan / kg, an increase of 100% / 5% per year.
Therefore, the company expects revenue, net profit and profit growth, and sales gross margin 53.
4%, an increase of 2.
Among them, the fragrance and fragrance business increased its gross profit margin by 15 due to rising product prices.
8 pct to 54.
2%, income scale reached 20.
8.5 billion (+56 compared to the same period last year).
In addition, due to the highest depreciation of the RMB, the company’s financial expenses decreased by 1 compared with 2017.
By quarter, 2018Q1-2019Q1, the average price of VA was 1348/780/381/377/375 yuan / kg, and the average price of VE was 107/58/38/38/40 yuan / kg.
Since the second half of 2018, VA and VE prices have stabilized, and the company’s single-quarter performance has basically stabilized at about 500 million.
The price of VA fluctuated at a high level, and the price of VE structure optimization is expected to rebound at the bottom.
VA produces only 6 companies worldwide, and the layout is stable.
Since VA’s inventory has been low since the BASF explosion, the oligopoly’s ability to control prices has changed. At the same time, DSM factories have recently stopped production for 2-3 months due to contamination of wastewater treatment bacteria./ Kg rebounded quickly to about 400 yuan / kg.
VA is expected to fluctuate around 400 yuan / kg for a long time.
New entrants in the cutting-edge VE industry have made breakthroughs, especially the intermediates trimethylhydronaphthalene and isophytol produced by Nante Technology using a new process. The cost has been reduced and the market price has been impacted.
Fannyne, the main raw material of Nent Technology’s isophytol, was supplied by Amyris. DSM announced the acquisition of Amyris’s Brazilian plant and Faneene intellectual property at the end of 2017. At the same time, Guanfu Group announced in early 2019 that it could reach a cooperation between stunt and DSM in the field of VE.Established a joint venture on vitamin E’s intermediate intermediate business.
The transaction is planned to be completed in the second or third quarter of 2019, and the two parties will retrofit and upgrade existing equipment.
With the maintenance and upgrade of Nante Technology and DSM production lines, the market supply will shrink significantly.
After the cooperation between the two parties in the future, the VE pattern will be optimized to support the bottom of the VE price.
The current VE price has increased from 40 yuan / kg to 42.
5 yuan / kg.
The Ministry of Commerce announced a methionine anti-dumping investigation, and methionine prices rebounded.
On April 10, the Ministry of Commerce issued an announcement and decided to conduct an anti-dumping investigation on imported methionine (methionine) originating in Singapore, Malaysia and Japan.
Stimulated by news of the anti-dumping investigation, the domestic methionine price on April 10 was 17.
5 yuan / kg rebounded to 18-20 yuan / kg and stopped quoting.
Domestic methionine is 70% dependent on imports, and Evonik accounts for about half. Due to the impact of anti-dumping research, Evonik’s domestic imports have decreased, and the domestic market supply has contracted.
At the same time, on April 17, Evonik decided to increase the methionine price globally, an increase of 7%, and the bottom of the methionine price rebounded. The company’s current methionine 5 mutation is advancing the construction of the second-stage 10 to methionine project. It is expected to be put into production in the first half of 2020.The highest period 15 is expected to be put into production in 2021, when the company’s total methionine production capacity will reach 30 tons.
New projects have been launched to ensure long-term growth.
The company plans to use self-raised funds of about 3.6 billion US dollars to invest in the construction of a biological fermentation project in Heilongjiang. The main projects include: 500 tons of lutein / year, 30,000 tons of hexonic acid, 146,700 tons / year of starch milk, and 155,100 tons of glucose./ Year, sorbitol (content 70%) 60,000t / a, construction period is two years.
The investment and construction project will form a starch milk-glucose- (chlorophyll is carotene, hexonic acid is gluconic acid, and sorbitol) industrial chain. At the same time, the downstream of sorbitol can be extended to VC, and the product series will be further improved.20 trillion, Lili about 7.
08,000 yuan to enhance long-term profitability.
Key products such as PPS and PPA in the new materials sector have been promoted in an orderly manner. Among them, PPS production capacity has been expanded from 5,000 tons to 1.
5In the early stage, and successively passed downstream customer certification, it is expected to enter the volume phase in 2019.
Investment suggestion: Maintain the “overweight” rating. As the overall average price of VA and VE has fallen, the 2019-20-20 cut is added, and the profit forecast for 2021 is added.
55 (original value 31.
55 (original value 33.
1 million yuan, EPS 1.
68 yuan, PE 17X, 14X, 11X.
Risk reminder: VA and VE prices have fallen sharply