Wanhua Chemical (600309): Polyurethane series stabilized in the second quarter, sales of new materials increased sharply

Wanhua Chemical (600309): Polyurethane series stabilized in the second quarter, sales of new materials increased sharply

Event description: On August 20, the company announced the 2019 semi-annual report.

According to the announcement, the company’s revenue in 2019H1 was 315.

4 ‰, a reduction of 15 per year.

4%; net profit attributable to mother 56.

2 trillion, a decrease of 46 a year.

5%; net profit after deduction is 50.

4 ‰, a decrease of 49 per year.

0 ppm; average average return on net assets increased by 13.

9%, a reduction of 11 per year.

5 units; net cash flow from operating activities was 82.

900 million, a decrease of 26 every year.


Event analysis: The main profit contributed by the polyurethane sector, and the decline in prices led to a decline in performance in 2019H1. The company achieved a gross profit of $ 9.9 billion and a gross profit margin of 31.

Among them, the polyurethane series contributed the main profit. The gross profit of the series was 70% (accounting for 71% of the total gross profit) and the gross profit rate was 43%. The gross profit of the petrochemical series was 8% (8%) and the gross profit rate was 10%.The gross profit of fine chemicals and new materials series is 9% (9%), the gross profit margin is 26%; the gross profit of other businesses is 13% (13%), the gross profit margin is 30%.

Compared with H1 in 2018, the company’s gross profit in 2019H1 has dropped by 6 billion U.S. dollars, of which the polyurethane series has fallen by 5.7 billion U.S. dollars, leading the return on performance. We judge that mainly due to the decline in MDI and TDI prices.The new material series dropped by 0.

500 million.

From the perspective of regional operations, in 2019H1, the company’s domestic main business gross profit was 6.3 billion yuan (cumulatively -28 billion yuan), and the foreign main gross profit was 3.5 billion yuan (over -3.3 billion yuan).

From the perspective of revenue, the company’s domestic main revenue was 17.9 billion (17%), and foreign main revenue was 13.2 billion (-4.1 billion). Foreign revenue also fell significantly.

In the first half of the year, BC, a wholly-owned subsidiary, achieved revenue of 59.

500 million, main business profit 13.

900 million, net profit 7.

6 trillion, exceeding the allocation of performance commitments in the first half of the year.

Q2, in the second quarter of 2019, the company achieved revenue of 155.

9 trillion, a decrease of 2 from the previous month.

3%; net profit attributable to mother 28.

300 million, an increase of 1.

0%; net profit after deduction is 26.

300 million, an increase of 8 from the previous month.

7%; overall sales gross margin is 32.

4%, an increase of 1 from the previous quarter.

8 units.

In the first half of the year, the company’s R & D expenses were 8.

33 ppm, an increase of 45 in ten years.


The continuous high investment in product research and development guarantees the company’s continuous improvement in competitiveness.

Polyurethane series: Q2 production increases and stable sales Although the Yantai MDI and TDI units were overhauled in the second quarter, the company’s polyurethane series still maintained steady growth, with the Q2 polyurethane series output of 70.

4 initial (+9 chain.
2%), and sales were 66 inches (+0 MoM).
6%) and revenue was 82.

400 million (same as QoQ), and the unit price was 12,455 yuan / ton (Qo -0.


In the first half of 2019, the MDI market price rose first and then fell. In the first quarter, the impact of the resumption of downstream operations and the replenishment of stocks gradually rebounded the MDI price. The aggregate MDI East China price rebounded from 1,1,500 yuan / ton to 17,900 yuan / ton.

In the second quarter, due to the weak real demand for downstream real estate and home appliances, coupled with the uncertainty of demand from customers and dealers due to the Sino-US trade war, they did not dare to accumulate inventory, and MDI prices began to decrease significantly.

The aggregate MDI East China price dropped from 17,900 yuan / ton at the beginning of the second quarter to 12,450 yuan / ton at the end of the second quarter.

In Q2 2019, the average price of East China MDI rose 8% from the previous month.

91%, down 28 each year.

42%; the average price of pure MDI decreased by 1 from the previous month.

68%, a decline of 25 per year.


Due to the lag effect of the ratio of the company’s MDI contract listing price to the market price, the company’s MDI contract listing price and Q1 in the second quarter of 2019 have generally increased: from April to June, the aggregate MDI prices were adjusted to 17,800, 19,000, and 14,500 yuan / ton, respectively.; Pure MDI prices were adjusted to 26200, 27200 and 23700 yuan / ton respectively.

The MDI industry in the next three years will be in a situation of supply and demand balance. At present, MDI prices are at historically low levels and it is expected that there will be less room for continued decline.

In the short term, September in the third quarter is the traditional peak season, and the fourth quarter is the typical impulse season in the refrigerator industry, which is expected to support the rebound in MDI prices.

In the long run, major global suppliers will be cautious about the scale of MDI’s supplementary production capacity and supply growth indicators.

Moreover, the old production capacity of more than 15 years in the world accounts for nearly 50%, and replacement maintenance will also reduce the operating rate. The global MDI operating rates in 2019-2021 are expected to be 74%, 76%, and 75%, respectively, compared with 2015-2018.decline.

We believe the MDI industry will remain balanced in the next three years.

Petrochemical series: Q2 output increased, sales improved. In Q2, the output of petrochemical series was 46.

3 positive 西安耍耍网 (+3 ring ratio.

6%), with sales of 67 inches (-16% MoM).

6%) and revenue was 34.

900 million (QoQ-13.

2%), the unit price is 5238 yuan / ton (+4 chain.


Our judgment is related to the adjustment of Wanhua’s product structure and the maintenance of PDH equipment in the second quarter.

Fine Chemicals and New Materials Series: Q2 sales have increased significantly from the previous quarter.

5 crowns (ring than -9.

2%), with sales of 9.

5 (+17.

9%) and revenue was 17.

100 million (+11 from the previous quarter.

3%), the unit price is 17,947 yuan / ton (-5 ring.


Although the company’s MMA / PMMA unit was overhauled in the second quarter, the company’s sales are still increasing rapidly.

The price growth rate from the previous month is related to the continued decline in the prices of some products (such as PCs) in Wanhua in the second quarter.

A large number of supplementary projects continue to empower Wanhua’s high-end industrial chain. Some of the projects under construction include: polyurethane industry chain extension and supporting projects (budget 17.5 billion, 65% completed), ethylene projects (17.5 billion), and US integration projects (86Billion), BC series projects (2.7 billion), thermal power phase II projects (1.4 billion), etc.

According to the EIA announcement, other proposed projects include: 4 nylon 12 project (25.

500 million), $ 50 / year polyether polyol expansion project (9.

1.7 billion), synthetic fragrance integration project (5.
7.6 billion), 4000 tons of propylene diamine series product construction project (3.
19 ppm), 3 thermoplastic thermoplastic polyurethane elastomer expansion project (1.

5.5 billion) and so on.

The expansion of overall production capacity will help the company to further consolidate the size of the industry leader, increase market share and product bargaining power; and the layout of the new product line will help form a complementary development with the existing industry chain, extend the industry chain, and increase product additionValue and resilience.

Investment rating and estimation Our founder chemical uses the cycle probability method to predict that the company’s net profit per ton of MDI in the next three years will have an 80% probability of remaining above RMB 3,454 / ton, corresponding to the net profit of MDI business in Wanhua China in 2019-2021.The 80% probability remains at 5, 3, 4, 7 billion yuan.

We expect the company’s net profit attributable to its parent to be 122 in 2019-2021.

04, 148.

74, 171.

2.5 billion, with EPS of 3.

89, 4.

74, 5.

45, corresponding to PE is 11, 9, 8 respectively, maintaining the “strongly recommended” level.

Risks remind the company of risks: the acquisition progress is less than expected, the MDI price fluctuates sharply, and the project production progress is less than expected; the merger and acquisition project has a profit and loss commitment; and the oil price changes.

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