Hualu Hengsheng (600426): Coal Chemical Leader Shows Cost Advantage, Performance Exceeds Expectations

Hualu Hengsheng (600426): Coal Chemical Leader Shows Cost Advantage, Performance Exceeds Expectations

The company released the semi-annual report for 2019, and the company achieved revenue of 70 in the report period.

76 ppm, an increase of 1 per year.

12%; net profit attributable to mother 13.

09 million yuan, a decrease of 22 a year.

09%; net profit after deduction to mother 12.

9.3 billion, a year-on-year decrease of 23.

10%; net cash flow from operating activities 20.

43 ppm, an increase of 8 per year.


Among them, Q2 single-quarter net profit attributable to the mother 6.

67 ppm, a reduction of 29 per year.

53%, an increase of 3 from the previous quarter.


Volume increase and price decrease, cost control and efficiency improvement are obvious: thanks to the company ‘s new production capacity of urea, glucose and other new products were put into production last year, the release of new production capacity led to the company’s production and sales scale increased, the company ‘s fertilizer and polyol sales were 122 in the first half of the year.

38 for the first time, 33.

05 At least, increasing by 55% and 180% each year.

From the quarterly data, Q1 and Q2, the average annual growth rate of sales of fertilizers is more than 50%, and the sales of polyols increased by 2 each time.

2 times and 1.

5 times.

In terms of price, except for the urea market price, which remained relatively stable overall, the prices of other products continued to decline. The average market price of the main products in the second quarter was the same.19%, qoq-1%), adipic acid (yoy-18%, qoq-5%), acetic acid (yoy-46%, qoq-14%), glucose (yoy-40%, qoq-12%),Melamine (yoy-23%, qoq-5%).

The substantial increase in the sales volume of superiority, and better hedged against the adverse effects of the downward price of products, the company’s overall revenue maintained a steady growth.

The price of coal in the main raw material market is relatively stable, and the purchase price of benzene and other materials is extended by about 30%.

The company’s comprehensive sales gross profit margin for the first half of the year was 29.

36%, a decrease of 3 per year.

77pct, of which 30 in the second quarter.

17%, still up by 1 from the previous month.

6pct, the company’s excellent level of cost control was achieved.

In terms of various expenses, selling expenses1.

89 ‰, a year-on-year increase of 68%, mainly due to the increase in product sales and transportation costs

5%, + 81%) due to a significant increase each year.

R & D expenses1.

61 ppm, an increase of 1 per year.

2.6 billion US dollars, mainly due to the increase in investment in research and development materials, new technologies, new products and other research and development investment will also ensure the company’s continued market competitiveness.

Affected by the above cost increase, the company’s expense ratio totals 7%, which is increased by nearly 3 pct per year.

The company’s net profit for the first half of the year was 18.

50%, where Q2 is 18.

87%, still up from 0.

7 points. The industry boom fluctuates, and the leading coal chemical industry demonstrates cost leadership: the global economy is down, trade frictions are escalating, and downstream demand is weakening. The prosperity of the chemical industry has continued to decline since Q3 of 18, and the industry’s profitability has continued to decline.

Against the backdrop of a highly declining industry boom, the company focused on its own costs, management and control of operating efficiency, strengthened platform construction and comprehensive utilization of resources, relied on the company’s clean coal gasification technology, and leveraged the advantages of multiple co-production.

47 ppm, a significant decrease of 49% compared with the beginning of the year. The company’s production and sales levels reached a new high, and the company’s leading competitors’ cost 杭州桑拿网 competitiveness advantage was highlighted.

In the first half of the year, the level of net profit attributable to mothers exceeded US $ 1.3 billion, exceeding market expectations.

Adipic acid starts construction, a new round of capital expansion drives the company’s future development: the company plans to invest 65.

According to the semi-annual report, the US $ 5.2 billion quality improvement of adipic acid and new amide and nylon materials projects have begun construction, and the company will add 16 in the future.

66 anion refined adipic acid, 30 carbonyl caprolactam, 20 capillary cations, 20 nylon 6 chips and other production capacity.

As of the end of the second quarter of 2019, the company is under construction3.

21 trillion, an increase of 26% over the end of the previous quarter.

The company invests in the construction of amides. The advantages of the nylon industry are mainly reflected in the advantages of the raw material side brought by the coal gasification platform, as well as the synergy and technical advantages among the industrial chains.

Relying on the company’s excellent level of cost control, the release of new production capacity will soon bring considerable performance increases, and a new round of capital expenditure will also drive the company’s development in the next few years.

As one of the major chemical provinces, the Shandong Provincial Government recently stated that 85 chemical parks in Shandong will no longer be supplemented, and the company parks have gained recognition. The park’s industrial chain is complete and the advantages of integration are obvious. In terms of safety supervision, it will take over environmental protection supervision and increase the restructuring of the industryUnder the background, long-term optimistic about the development of the company’s integrated park.

Upgrade earnings forecast and maintain BUY rating: raise the company’s operating income for 2019-2021 to 145.

22, 152.

02, 164.

8.9 billion (135 before adjustment).

83, 144.

46, 160.

7.2 billion), raising net profit to 25.

42, 27.

75, 31.

2.6 billion (23 before adjustment).

12, 25.

47, 30.

350,000 yuan), the corresponding EPS is 1.


71, 1.

92 yuan / share, the corresponding PE is 9 respectively.

8X, 9.

0X, 8.

0X, maintain “Buy” rating.

Risk warning: raw material prices rise sharply; new projects are progressing less than expected