Hengyi Petrochemical (000703) In-depth Report 1: The Company’s Value Is Underestimated and Upside Worth Attention
At this stage, the value of the company is underestimated. The Brunei Refining and Chemical Project is about to be put into production, and the expected economic benefits are better.
The mainstream view of the company’s value market is the relative estimation method, that is, 2020 net profit * price-earnings ratio.
At least, in 2020, refining,四川耍耍网 PTA, and polyester fiber are at different stages of the boom cycle. It is also a subjective judgment for the corresponding city earnings ratio.
In order to better quantify the company’s intrinsic value, we use segment assessment to analyze Brunei’s refining and chemical projects and the company’s internal business separately.
Brunei Refining and Chemical Project adopts DCF method to estimate that Brunei Refining and Chemical Project is not suitable for benchmarking with Shanghai Petrochemical for two reasons: 1) We expect the profitability of Brunei Refining and Chemical Project to merge with Shanghai Petrochemical;There is a significant difference in the lifespan of the Shanghai Petrochemical plant.
Taking into account the uniqueness of the refinery, which is not completely comparable, we use DCF to estimate that the intrinsic value of the Brunei refinery and chemical project is 66.9 billion, instead of making up 50.3 billion.
The initial business used the replacement cost method to estimate the company’s share of PTA capacity of 1350 per second per year, polyester filament staple fiber capacity totaling 590 tons / year, bottle chip capacity of 150 tons / year, caprolactam capacity of 40 replacements / year, and shares in ZhejiangCommercial Bank 4%.
Using the reset value, the reset can redirect the commissioning time of each device to a new rate and refer to the latest investment intensity.
The assets of PTA, polyester polyester, bottle flakes, and caprolactam attributable to shareholders of listed companies are 56.
The value of 4% equity of Zheshang Bank in the Hong Kong stock market is 32.
The controversial upward space is as of September 30, 2019. The size of Hengyi Petrochemical City is 37 billion, and we believe that the reasonable value of Hengyi Petrochemical is 577.9 billion. There is a breakthrough upward repair space.As a catalyst, we reduced the capacity utilization rate of the Brunei project in 2019 from 33% to 16%, and maintained the capacity of 90% in 2020/2021, and adjusted the company’s net profit forecast to 32.
10,000 yuan, maintain “Buy” rating.
Risk warning: PTA-polyester industry chain profits increase, the profitability of the Brunei project exceeds expectations, and crude oil prices fluctuate sharply.