Rongsheng Petrochemical (002493) Annual Report Comments: Fluctuation in Oil Prices Slows Performance and Follows Progress of Zhejiang Petrochemical Project

Rongsheng Petrochemical (002493) Annual Report Comments: Fluctuation in Oil Prices Slows Performance and Follows Progress of Zhejiang Petrochemical Project
2018 net profit tax rate of 20% Rongsheng Petrochemical released the 2018 annual report, the company achieved operating income of 914.20,000 yuan, an increase of 26 in ten years.9%, net profit 16.1 ‰, 20 years ago.3%, compared with 16.4 trillion is basically in line with expectations.Follow 62.According to the latest equity calculation of 900 million shares, the corresponding EPS is 0.26 yuan.Among them, Q4 achieved operating income of 297.40,000 yuan, an increase of 63 in ten years.7%, net profit -1.6 ppm, compared with 4 in the same period in 2017.500 million.The company plans to pay a cash dividend of 1 yuan (including tax) for every 10 shares.We expect the company’s EPS for 2019-2021 to be 0.67/0.85/1.14 yuan, maintaining the “overweight” level. PTA-Polyester Industry Chain High Boom According to Baichuan Information, the average annual price of PTA / polyester filament (DTY150D) in East China in 2018 was 0.64/1.11 tons / ton, an increase of 25% / 13% over the previous, and the average annual price spread of PTA-PX expanded by 61% to 997 yuan / ton.The company’s PTA business achieved revenue of 221.400 million, an increase of 15 in ten years.4%, gross margin increased by 3.7 points to 7.5%, the subsidiary Yisheng Dahua achieved net profit4.600 million yuan (YoY + 387%); polyester business achieved revenue of 110.3 ‰, an increase of 15 in ten years.7%, gross margin decreased 西安耍耍网 by 3.3 points to 8.8%, Shengyuan Chemical Fiber realized a net profit of 1.3 ppm (YoY-51%); in terms of aromatics, the average price of PX / pure benzene in East China is 0.83/0.640,000 yuan / ton, a temporary change of 20% / 5%, business revenue increased 34% to 190 in ten years.8 ppm, gross margin decreased by 0.1pct to 12.8%, Sinopec’s net profit was 9.0 billion (YoY-12%). Rising financial costs, loss of changes in fair value dragged down the performance report, and changes in the company’s sales / management / financial expense ratios.1 / -0.1/0.9pct to 0.8% / 1.4% / 1.5%, of which the increase in financial expense ratio is mainly due to the increase in corporate bank loans and interest expenses.In addition, due to the futures business floating losses (-4.3.4 billion), loss from changes in fair value of the company in 20183.厦门夜网40 ppm, probability of impact on performance. Oil price fluctuations have affected the 18Q4 performance, and the changes in oil prices caused by the Formosa Plastics Incident or the rise of the price chain of the industrial chain. The average PTA / PTA-PX spread in East China in the 18Q4 quarter fell by 11% / 89% quarter-on-quarter, and the company’s fair value losses during the fourth quarter4.US $ 5.7 billion, resulting in single quarter earnings and dragging down performance.With the coming of the downstream peak season, according to Baichuan Information, the price of PTA in East China was 0 in mid-April.66 tons / ton, the PTA-PX spread was 903 yuan / ton, and the 18-point lows rebounded by 9% / 95% respectively; the price of polyester filament DTY150D has risen by 7% to 1 compared with the end of 18.0.6 million yuan / ton.In addition, the explosion accident at the Formosa Plastics Plant on April 7 may lead to the rise of the central price center of the PX-PTA-polyester industry chain (see the report on April 8 for details). The Zhejiang Petrochemical project is approaching, and the company ‘s long-term development space has opened the company’s first phase of the integration of petrochemicals in the early 2000 / year of Zhejiang Petrochemical (51%). The integration of refining and chemical projects has progressed smoothly. The trial production preparation stage has now been carried out.The project will be put into production in 2019. By then, the project will guarantee the company’s upstream raw material support, and the overall profit prospects are good. Maintain “Overweight” rating Considering the scale of PTA and polyester production capacity in the next 1-2 years, we slightly cut the company’s 2019-2020 net profit forecast to 42/53 (original value of $ 4.5 / 5.4 billion), and forecast the company in 2021.The net profit was 7.2 billion yuan, and the corresponding EPS was 0.67/0.85/1.14 yuan, maintaining the “overweight” level. Risk reminder: the risk of large fluctuations in oil prices, the refining and chemical project construction progress is not as expected.