Satellite Petrochemical (002648): 33% -44% increase in annual report is in line with market expectations

Satellite Petrochemical (002648): 33% -44% increase in annual report is in line with market expectations

An increase of 32 in 2019.

9% -43.

5%, performance in line with expectations Satellite Petrochemical disclosed the 2019 performance forecast on January 22, 2020, and is expected to achieve a net profit of 12.

5-13.

500 million, an annual increase of 32.

9% -43.

5% to 10.

The current EPS of 6.6 billion shares corresponds to 1.

17-1.

27 yuan, the performance is in line with expectations.

Among them, the net profit was 3 in 2019Q4.

28-4.

2.8 billion, an annual increase of 3.

2% -34.

7%.

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

26/1.

69/2.

05 yuan, maintaining the “overweight” level.

The highest spread fluctuated slightly overall, and the incremental contribution from PDH Phase II and PP Phase II projects has gradually stabilized. According to Baichuan Information, the average price of acrylic acid / polypropylene market in East China in 2019 was 7510/8938 yuan / ton, a decrease of 10.

7% / 9.

7%; polypropylene-propylene / acrylic acid-propylene / propylene-formaldehyde price differences are 1700/2458/2810 yuan / ton, each shift +19.

4% /-2.

8% /-20.

9%, because the company mainly sells polypropylene and acrylic products, the overall price difference is small.

At the same time, the company put into production 45 plug-in PDH and 15 plug-in PP projects on February 13 and May 25 respectively, increasing production capacity and contributing to performance gains.

The prices of acrylic acid and polypropylene have been consolidated at a low level, and short-term downside risks are reported by Baichuan Information. On January 22, 2020, the prices of acrylic acid and polypropylene in East China were 6800 and 7,900 yuan / ton, respectively, and have changed by +2 since the beginning of the year.

3% /-4.

8%.

Due to the increase in oil prices and the lowest price increase in winter, the price difference between the two is low. In terms of weight, CNOOC Huizhou, Shanghai Huayi and other mainstream manufacturers coordinated maintenance to support balanced supply and demand, and polypropylene inventory was at a relatively low level. We believe that acrylic acid and polypropylene pricesShort-term downside risks are minor.

With the post-holiday demand boost, we expect the product boom to improve gradually.

Construction of preliminary split project went smoothlyThe company announced in July 2019 that it plans to raise US $ 3 billion for the construction of the Lianyungang project. The CSRC has received feedback from the CSRC on the split project, project design, terminal and shoreline approval, and investment in storage.Tank construction progressed smoothly, and the company expects the first phase of 125 ethylene and supporting capacity to be put into production 杭州桑拿网 in 2020Q3.

The satellite petrochemical company that maintains the “overweight” rating is a domestic leader in the C3 industry chain. The Lianyungang light hydrocarbon comprehensive utilization project opens up the company’s growth space due to the company’s 101.

The 10,000 share equity incentive was unlocked on November 15, 2019, and we adjusted the company’s EPS for 2019-2021 to 1, respectively.

26/1.

69/2.

05 yuan (the original value was 1.

27/1.71/2.

07 yuan), combined with the comparable company’s estimated level (12 times PE in 2020), giving the company 11-13 times PE in 2020 with a target price of 18.

59-21.

97 yuan (previous value was 15.

24-17.

15 yuan), maintaining the “overweight” level.

Risk reminder: The risk of the crude oil price fluctuating due to the risk that the new project’s production progress is not up to expectations.