Hengli Petrochemical (600346): 4Q19 refining performance exceeded expectations; raise profit forecast and target price

Hengli Petrochemical (600346): 4Q19 refining performance exceeded expectations; raise profit forecast and target price

Predicting the annual profit growth of 228% in 2019Hengli Petrochemical issued a pre-announcement of the annual results for 2019, which is expected to achieve a net profit attributable to the mother of approximately 10.9 billion, an increase of approximately 228%, exceeding the market consensus expectation of approximately 21%; excluding government subsidies, hedgingAfter one-time gains such as value preservation, the net profit after deducting non-attribution is expected to be about 10.1 billion yuan, an 南京桑拿网 annual increase of about 263%.

In the fourth quarter of 19, the company achieved a recurring net profit of approximately 33.

2 ppm, an increase of about 19% month-on-month. In the environment of the downturn of the petrochemical industry, the performance of the company once again exceeded expectations and proved the company’s performance competition and stable profitability.

Looking at the results of the fourth quarter of 1919, we expect the refining and chemical business to achieve a recurring net profit of approximately US $ 2.6 billion, with an average monthly profit of more than 800 million, which is better than the average monthly average of 6 in the 2Q19-3Q19 period.


500 million profit level.

We believe this is mainly due to the further increase in project load at the end of the year, and the unilateral increase in international oil prices in 4Q19 contributed part of the inventory gain.

We expect the PTA business to achieve a recurring net profit of more than 300 million, that is, a single ton of net profit of about 200 yuan, and the average conversion status of the industry over the same period, which proves that Hengli Petrochemical’s PTA production cost is more than 200 yuan / ton in competition with the industry average.Advantage.

We expect the polyester business to achieve a recurring net profit of approximately US $ 300 million, which is slightly better than our expectations. This is mainly due to the 4Q19 higher oil prices spurring downstream replenishment and replacement. The boom in polyester production and sales combined with low inventory supports the polyester business.Earnings improved month-on-month.

Focus on cash flow management strategies or the next focus.

As the refining and petrochemical projects are put into operation and bring large and stable cash inflows, in addition to the possibility that some of the cash flows may be used to trigger the operation of the ethylene project that is about to be put into operation, we believe that the company’s merger focus will be on dividends to shareholders and repayment of loans to optimize assets and liabilities.Make a strategic balance in the selection of the table.

We believe that the scale strategy may be recognized by the market; we judge that the company is expected to maintain a dividend payout ratio of 40% or more. Based on the latest closing price, the yield will increase by 3.


The ethylene project is about to be put into production, and the profit level may reach a higher level.

We expect the company’s ethylene and downstream ancillary projects under construction are expected to switch to commercial transportation in 1Q20 and solidify in 2Q20.

We believe that once the project is put into production, supporting refining and chemical projects will form a more complete integrated layout, supporting the company’s profitability to a new level.

Estimates and recommendations raise 2019/20 profit by 25% / 27% to 1.


88 yuan, profit 2 in 2021.

07 yuan; raise target price by 27% to 22.

6 yuan, corresponding to 12 times 2020 price-earnings ratio and 29% upside.

Maintain “Outperform” rating.

The company’s current consensus corresponds to 9.

3 times 2020 price-earnings ratio.

Risk oil price fluctuates dynamically; the scale of new project production; the deviation between the performance of the report after the audit and the forecast.