Tongkun Co., Ltd. (601233) Interim Review: PTA’s performance increased sharply

Event: The company released its semi-annual report for 2019, and achieved a total operating income of 246 in 19H1.

3.3 billion (+31 year-on-year.

90%), achieving net profit attributable to mother 13.

900,000 yuan (+2 year-on-year.

16%) and realized deduction of non-net profit13.

110 thousand yuan (-1 year on year.

87%), the overall basically in line with market expectations.

Q2 single quarter net profit 8.

69 ppm, PTA can bring profit growth.

Since the company’s performance since 2019, with the commissioning of the Hengli PX project, the PTA transfer supply and demand layout has improved, and Jiaxing Petrochemical (400 in two phases became PTA) has significantly increased its profits.

In 2019H1, Jiaxing Petrochemical’s net profit reached 8.

50 ppm-This includes the contribution of the PTA business and some filaments, approximately the same period last year3.

3.7 billion increased by 152.

twenty two%.

From the perspective of price difference, PTA insertion deduction of 600 yuan / ton, net profit per ton after tax after processing fee is 432 yuan / ton, instead of Q1’s 103 yuan / ton growth rate, PTA profit growth directly contributed to Q2 single quarter net profit 8.

6.9 billion good performance.

Filament is compensated by quantity, and it is difficult to prevent the length of gross profit: the strength of the proportional PTA transition, and the approach of the filament is slightly embarrassing.The logic of not buying down; mergers, trade wars have led to the suppression of textile export orders, and weaving swaps have also been pressured by high stocks of grey fabrics, further suppressing the price and quantity of upstream filament replacement.

From the perspective of business operation, the gross profit of filament in 19H1 was 15.

9 ppm (net of PTA profits), about the same period last year.

1.4 billion US dollars 28.

18%-This is still the case with increased filament production (yield increase of about 10%).

However, on the whole, how does Tongkun’s PTA-filament industry chain layout contribute to overall profitability and stability?

北京桑拿洗浴保健 Profit forecast: The net profit attributable to mothers is expected to be 28 in 2019-2021.

13/35.

81/37.

80 ppm, corresponding to PE is 8/6/6 times, maintaining the “Buy” level.

Risk reminder: Oil price drops sharply, and macroeconomic downside risks.