Rongsheng Petrochemical (002493) 2018 Annual Report Comments: Financial Costs Affect Performance Zhejiang Petrochemical Project Steady Progress

Rongsheng Petrochemical (002493) 2018 Annual Report Comments: Financial Costs Affect Performance Zhejiang Petrochemical Project Steady Progress
This report reads: It is expected that the overall supply and demand of PTA will be in a tight balance in 2019, and the company will benefit significantly as an industry leader. Investment points: Upgrade the rating to increase holdings and lower earnings forecasts.Due to the higher-than-expected increase in financial expenses, we lower the EPS for 2019/2020/2021 to 0.65/1.22/1.RMB 40 (The pre-performance values for 2019/2020 are 0.80/1.42 yuan).Adopt the industry average PE13 in 2020.03 times, raise the target price to 15.90 yuan. The company’s fourth quarter 2018 performance was lower than market expectations.The company achieved net profit attributable to mothers in 201816.1 ‰, an average of 20% in ten years.Mainly due to the increase in the company’s financial expenses.The company’s financial expenses increased by 4 from 2017 due to interest expenses and exchange losses.4 billion percent increased to 13 in 2018.300 million.Among them, the exchange gains and losses were 4 in 2017.7 million foreign exchange gains turned into 2 in 2018.600 million exchange losses.At the same time, the company made zero in 2018 due to factors such as the decline in oil prices in the fourth quarter.600 million inventory loss. In 2019, the overall supply and demand of PTA is in a tight balance, and the company has significantly benefited as an industry leader.The company has a PTA production capacity of 1350 per share.Subsidiaries Yisheng became large, Zhejiang Yisheng and Hainan Yisheng achieved net profit attributable to their mothers in 20183.90,000 yuan, 1.9 trillion and 1.400 million yuan, achieving a net profit of about 120 yuan per ton of PTA tons.In the second quarter of 2019, due to the improvement of maintenance supply and demand, we 南京桑拿论坛 expect the PTA price gap to widen in the second and third quarters.According to the currently-opened new production plans for each component of polyester, we have calculated the supply and demand balance of each component of polyester. The Zhejiang Petrochemical Project is advancing steadily.As of the end of 2018, the construction and installation of the first phase of Zhejiang Petrochemical has been basically completed.The company initially turned to the trial production preparation and pre-sale stages. Risk warning: oil prices fall; PTA, aromatics processing section is interrupted.