Yuntianhua (600096): The decline in the prices of major products dragged down the performance of the asset-liability ratio for four consecutive quarters
Investment Highlights: The company released the third quarter report of 2019, and its performance was in line with expectations.
19 1-3Q19 The company achieved operating income of 410.
8.5 billion (+11 year-on-year.
89%), net profit attributable to mother is 1.
3.4 billion (+62 y / y.
12%), of which non-recurring profit and loss is 8148.
09 million yuan, the net profit after returning to the mother is -5106.
460,000 yuan, a year of loss of 33.4 million yuan, performance in line with expectations.
Among them, 3Q19 single quarter realized operating income of 126.
8.3 billion (compared to -6.
42%, season 13.
22%), net profit attributable to mother is 0.
08 million yuan (yoy-54.
43%), single-quarter sales expenses, management expenses (including R & D expenses), and financial expenses fall every 7th.
23%, up and down 11 respectively.
The decrease in zero net profit in the third quarter of 19 was due to the main products phosphate fertilizer, compound fertilizer, urea and paraformaldehyde substitutes.
The company also announced a cash investment of 200 million US dollars to establish Yunnan Phosphor Industry Technology Co., Ltd. to carry out basic yellow phosphorus upgrades and research and development and industrialization of fine phosphorus chemical products.
Weak demand has led to the company’s category of fertilizer products. The price of polyacetal has continued to decline, the spread has narrowed, and profits have fallen.
The average sales price of 1-3Q19 company’s diammonium phosphate, monoammonium phosphate, and urea (excluding tax, the same below) decreased each year.
34%, in which the price of 3Q19 accelerated decline, every 8 drops.
5%, the spread narrowed, and the profitability of the fertilizer business was broken down.
The price of phosphate rock in Yunnan is the highest stable. The output and sales volume of the company’s phosphate rock continued to increase by 1-3Q19.
7%, good profitability.
In 1-3Q19, some of the producers that had stopped production gradually resumed production, and production capacity gradually picked up. However, sluggish downstream demand caused prices to drop. In 1-3Q19, the company’s average sales price of polyformaldehyde decreased twice.
Continue to advance debt reduction, actively optimize asset structure, and reduce the asset-liability ratio for four consecutive quarters.In 1H19 Phosphate Group introduced CCB investment and Bank of Communications investment to complete the 10 trillion market-oriented debt-to-equity swap. In 3Q19, the asset-liability ratio continued to decrease by 0 compared with the second quarter.
3 up to 88.
54%, financial expenses fell significantly in a single quarter, 19Q3 company’s financial expenses was 5.
8.8 billion, a year-on-year decrease of 23.
Due to the decrease in controllable expenses, the management expenses (including R & D expenses) in the third quarter of 19 decreased by 14.
In the future, the company will continue to optimize and control the controllable expenses. At the same time, it will actively seek investors, accelerate cooperation with financial institutions, promote equity financing and share-equity debt-to-equity conversion of subsidiaries, increase the company’s equity capital through capital increase and share expansion, improve the capital structure, and reduceAssets and liabilities.
Invested in the establishment of Yunnan Phosphorus Technology Co., Ltd. 苏州夜网论坛 to promote the integration and development of the yellow phosphorus and fine phosphorus chemical industries, and to enhance the company’s continuous competition in fine phosphorus chemical business.
The “three phosphorus remediation” takes the governance of the yellow phosphorus industry as the first shot. The domestic yellow phosphorus operating rate has plummeted. The price center of yellow phosphorus has moved up a step for a long time. The company has a large amount of phosphorus resources and technology. It currently has three types of yellow phosphorus production capacity.In the future, the establishment of fine phosphorus chemical product chains such as yellow phosphorus, polyphosphoric acid, and phosphate will be strengthened to enhance the competitiveness of phosphorus chemicals.
Earnings forecast and investment rating: “Three Phosphorus Remediation” accelerates the industry’s supply-side reform. It has long been positive for Phosphorus Chemicals, transforming the company’s gradual improvement of its asset-liability structure, and its performance has gradually improved. We maintain the company’s 2019-2021 net profit return to motherhood as 3.
74 trillion, EPS is 0.
47 yuan, the current market value of the corresponding PE is 27X, 15X, 12X.
Selected as a “Double Hundred Enterprises” to welcome the historical performance of state-owned enterprise reform, fair incentives to highlight the reform decision and confidence in future operations. The cost advantage of integrated mineral fertilizers is obvious, and the level of overweight is maintained.
Risk Warning: 1.
The prices of phosphate ore, phosphate fertilizer, and polyformaldehyde continue to fall; 2.
The progress of debt reduction is gradually expected, and the asset-liability ratio continues to rise; 3.
Three expenses continue to grow