Sanyou Chemical (600409) 2019 performance preview comment: the bottom of the viscose staple fiber proved the performance improvement inflection point upwards

Home / Sanyou Chemical (600409) 2019 performance preview comment: the bottom of the viscose staple fiber proved the performance improvement inflection point upwards

Sanyou Chemical (600409) 2019 performance preview comment: the bottom of the viscose staple fiber proved the performance improvement inflection point upwards

Event: The company issued a 2019 performance forecast, reported and achieved net profit attributable to its mother.

200 million, a year-on-year decrease of 55% and a deduction of non-net profit of 6.

300 million, a year-on-year decrease of 62%; of which the net profit attributable to the mother in the fourth quarter of the year1.

900 million, an increase of 35.

5%, deducting non-net profit 1.

100 million, down 20 from the previous month.

2%, in line with expectations.

Investment summary: The core product price declines in 2019 are mainly responsible for maximizing performance.

In 2019, the market for viscose staple fiber, silicone, and light soda ash is obvious, and the market for heavy soda ash is generally flat with the same period of last year.

The average market price of viscose staple fiber in 2019 is 11,933 yuan / ton, which is down by 19 each year.

3%, the price gap temporarily reduced 1364 yuan / ton, mainly due to the increase in the industry’s supplementary production capacity, the overall supply surplus.

The average DMC market price in 2019 was 18,803 yuan / ton, a year-on-year decrease of 36.

1%, the price gap temporarily narrowed 8782 yuan / ton, mainly due to insufficient demand in overseas markets, a large increase in production capacity is expected to be put into production.

In 2019, the average market prices of young and heavy soda ash were 1,725 yuan and 1,919 yuan / ton, respectively, and they fell 7 times.

8%, 1.

The price difference has been reduced by 83% / ton and 30 yuan / ton respectively. The soda ash industry has maintained a tight balance between supply and demand and increased production capacity. The market size has changed little.

In 2019, the average market prices of PVC and caustic soda were 6,759 yuan and 3022 yuan / ton, respectively, and they continued to fall by 0.

1% and 26%, mainly due to weak downstream market demand for caustic soda.

In the fourth quarter, the market for major products declined, resulting in a decrease in the non-performance results.

In the fourth quarter, except for heavy soda ash, PVC, and caustic soda, the prices of other products were basically stable compared to the previous month, and the 上海夜网论坛 prices of other products fell overall.

In the fourth quarter, the average prices of viscose staple fiber, light soda ash, and DMC market were RMB 10,564, RMB 1,587, and RMB 17,459 / t, respectively, which were down 9 from the previous month.

2%, 2.

1%, 11.

4%.

In the fourth quarter, viscose staple fiber, light soda ash, heavy soda ash, and DMC spreads decreased by 693 yuan, 68 yuan, 38 yuan, and 1963 yuan / ton, respectively.

The company’s viscose staple fiber sales have grown significantly, and the industry is expected to gradually recover.

In the second half of 2018, the company added 25 / year viscose staple fiber production capacity, and the incremental contribution in 2019 is obvious.

The viscose staple fiber industry is currently in a serious situation and has entered the bottom of the industry. In the future, some supplementary production capacity changes, and some backward production capacity will withdraw, and the industry is expected to usher in recovery.

The company is a leader in the viscose staple fiber industry, with a high proportion of high-end differentiated products. It also has raw materials such as caustic soda, which helps to benefit from the recovery of the viscose staple fiber industry.

Profit forecast and investment recommendations: The company is a domestic double-header of viscose staple fiber and soda ash, and its performance is expected to bottom out. It is expected that the company’s EPS in 2019-2021 will be 0.

35, 0.

42, 0.

59 yuan, the current sustainable corresponding PE is 18 respectively.

2, 15.

1, 10.

8 times, maintaining the “overweight” level.

Risk warning: the price of raw materials fluctuates sharply; the price of products drops sharply; product sales are lower than expected

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