Sanyou Chemical (600409): Increasing core product prices, company performance expected to gradually improve

Sanyou Chemical (600409): Increasing core product prices, company performance expected to gradually improve

Recently, domestic viscose staple fiber rebounded, soda ash prices bottomed out, and the price of organic silicon continued to rise. The current market price of viscose staple fiber is 12,600 yuan / ton, which has gradually increased by 300 yuan / ton since the end of March.East China’s heavy soda ash prices are 1900 yuan and 1950 yuan / ton, respectively, which have gradually increased by 250 yuan and 25 yuan / ton since the end of March; the market price of organic silicon DMC in East China2.

130,000 yuan / ton, gradually increasing since mid-February.

  Investment highlights The production of viscose staple fiber production is nearing its end. Recently, the price has gradually rebounded. The production capacity of the viscose staple fiber industry has been concentrated and delivered in the past two years. By the end of 2018, the industry’s total production capacity was about 470 tons / year, of which in 2018, the capacity increased by about 61 tons / year.It is growing by 15% every year. In the first half of 2019, some of the devices will be restarted and deferred units will be put into operation. The incremental increase is expected to be 57 years / year. Subsequently, the industry has no new production capacity for the time being.

As the demand growth rate is difficult to adapt to the new production growth rate, the price of viscose staple fiber has dropped to 12,300 yuan / ton all the way, and it has gradually decreased by about 29 since the high point in March 2017.

3%, the whole industry is serious.

Recently, due to the low load in the industry, manufacturers are expected to have significant price trends, while downstream demand has improved, and product prices have rebounded slightly by about 300 yuan / ton. The company’s existing production capacity is about 70 units / year, which is beneficial to the company’s profit improvement.

The supply and demand of soda ash market is tight, and the product price continues to rise. The soda ash industry is generally in a tight supply and demand situation. Since the end of March, due to the suspension of the soda ash plants in Jiangsu and Yunnan for some reason, the tight inventory of enterprises and the downstream active procurement, the price of soda ash has continued to rise.Soda ash increased by about 14% from the bottom, and the price of heavy soda ash rose slightly.

6%.

The downstream industry started stable in April. It is expected that the demand for soda ash will be mainly solid. The price increase will stimulate the active participation of middlemen and the overall market is volatile. This week, the parking maintenance of manufacturers such as Jinshan in Henan and Anhui Red Quartet will continue to increase the number of alkali enterprises.The supply is gradually tightening. It is expected that under the continuous advancement of weak supply and strong demand, the domestic soda ash market price will continue to improve. The company’s existing production capacity is 340 years / year, and the performance will increase.

Silicone transaction prices are firm, and it is expected to maintain the best level. The domestic silicone market boom began to decline rapidly in May 2018. Silicone DMC prices fell to about 18,000 yuan / ton in January 2019, and gradually decreased from a high point.48%, the industry as a whole is not profitable, some SMEs are profitable.

After the Spring Festival and the Lantern Festival, organic silicon downstream companies have resumed work, and purchasing sentiment has gradually increased. At the same time, Sino-US trade friction indicators have improved, export expectations are the best, product prices have bottomed out, and the 淡水桑拿网 three-month Canton Fair has increased demand.As well as the impact of environmental protection and safety escalation, the market purchase mentality has gradually strengthened, and prices have started to rise significantly. At present, prices have gradually increased by 3,300 yuan / ton from the bottom. The price of organic silicon in the second quarter is expected to continue to maintain the level.The annual production capacity of the single unit is estimated to be 20, and the recent improvement in performance is expected to be significant.

Profit forecast and estimation We expect the company’s net profit attributable to the parent to be 17 in 2018-2020.

2.6 billion, 13.

56 billion, 15.

5.2 billion, an annual increase of -8.

6%, -21.

5%, 14.

5%, the current sustainable corresponding PE is 9.

5, 12.

1 and 10深圳桑拿网.

6 times. After the annual report is formally announced, we will adjust the company ‘s profit forecast. At present, the company ‘s main product industry is gradually picking up. It is optimistic that it will be bigger and stronger under the circular economy system and maintain the “overweight” rating.

Risk Tips 1. Raw material prices fluctuate sharply; 2. Product prices fall sharply; 3. Product sales fall short of expected financial summary