Dongfang Shenghong (000301): H1 Performance Meets Expectations Lianyungang’s Refining and Chemical Project in the 1600s Steady Progress

Event: The company released the semi-annual report for 2019 on August 31, and achieved operating income of 122 in the first half of the year.

97 ppm, an increase of 16 in ten years.

32%, net profit attributable to mother is 7.

96 ppm, an increase of 10 in ten years.

84%.

After deducting non-return to the net profit of the mother 6.

09 million yuan, down 11 years ago.

64%; net cash flow from operating activities16.

75 ppm, a significant increase of 634 per year.

11%.

The overall operation of the chemical fiber segment was stable. The acquisition of Su Zhen Biological focused on the development of balanced fiber products.

The company mainly focuses on DTY, a high-end polyester filament product, and achieved revenue of 53 in the first half of the year.

47 ppm, gross margin is 14.

06%; POY revenue is 15.

20 ppm, gross margin is 3.

09%; FDY revenue was 14.

55 ppm with a gross margin of 10.

62%, the overall operation of the chemical fiber segment was stable.

In order to further improve the differentiation rate of the company’s chemical fiber products and enhance the competitiveness of the chemical fiber industry, the company reports 6799.

98 million acquired Su 杭州桑拿网 Zhen Biological 100% shared date bio-based PDO and new bio-based fiber high-tech production technology, the report states that Su Zhen Biological has achieved a net profit of 10.21 million yuan.

Acquired Honggang Petrochemical and injected 150 tons of PTA assets.

The company reported 100% equity of Honggang Petrochemical in the group acquired by the merger and injected 150 PTA assets. Currently, 240 PTA projects in the second phase are under construction.

As the PTA plant develops to a larger scale and the industry concentration continues to increase, the oligopoly layout will gradually lag behind the small-scale phase-out. In the next two years, we believe that the prosperity of the PTA industry will remain at a high level.

Lianyungang’s 1600 preliminary refining and chemical project has steadily advanced, creating a 天津夜网 complete “refining and chemical-PX-PTA-polyester filament” full industrial chain.

Company with 10.

1 million cash completed the acquisition of 100% equity in Shenghong Refining and Chemicals Co., Ltd., and injected the initial refining and chemical project of Lianyungang 1600 into the listed company.Under the condition of constant reduction, local adjustments were made to some units, so that the proportion of processed oil in the project to crude oil processing volume was reduced from 37% to 31%.

The project was approved by the Jiangsu Provincial Development and Reform Commission in September 2018, and construction was officially started after the approval of the environmental assessment in December 2018. It is planned to be completed and put into production by the end of 2021.

Investment suggestion: The company will form a complete “refining-PX-PTA-polyester filament” full industry chain in the future. It is estimated that the company’s net profit attributable to the mother in 2019-2021 will be 15 respectively.

25, 16.

75, 20.

07 trillion, EPS is 0.

38, 0.

42, 0.

50 yuan, corresponding to PE is 13.

4, 12.

2, 10.

2x, maintaining the company’s “Buy” rating.

Risk warning: International oil prices have fallen sharply, the macro economy has fallen, and new project construction progress has fallen short of expectations.