China Chemical (601117): Overlap in revenue and low base drive high performance growth in 2019

Key points of investment The company’s net profit growth attributable to its parent company in Q4 will exceed 50%, mainly due to the continued heavy volume of Q4 revenue and the decrease in accrued asset impairment losses.

From the perspective of profit, the company is expected to realize net profit attributable to mothers in 201929.

0 ppm-32.

800 million US dollars, previously increased by 50% -70%; the company is expected to achieve net profit deduction to non-mother 27.

6 ppm-31.

0 ppm, an increase of 60% -80% in a year; among them, Q1-Q4 increased by 55 respectively compared with the previous year.

61%, 43.

16%, 55.

80%, 47.

2% -173.

At 4%, the average net profit attributable to mothers in each quarter maintained extremely rapid growth.

　　The company’s net profit margin for Q4 increased substantially by approximately zero.

5pct, maintaining an upward trend, we believe that it is mainly due to the improvement in gross profit margin and the decline in the proportion of impairment losses.

From the perspective of the yield situation, the net interest rate attributable to mothers in 2018 is about 2.

8% -3.

2%, an increase of about 0 over the previous year.

6pct; quarter by quarter, Q1-Q4 in 2019 will achieve net profit attributable to mothers, respectively.

5%, 4.

7%, 3.

5%, 1.

1% -2.

0%, an increase 重庆耍耍网 of about 0 over the same period last year.

8pct, 1.

1, 0

7pct, 0.

5 points.

The increase in profitability is mainly due to the improvement in gross profit margin and the decline in the expense ratio during the period: The improvement in gross profit margin has mainly benefited from the improvement in the profitability of the main business of the project and the reduction in taxes and additional income from the accrued land revenue.The appreciation has increased exchange gains.

　　The company entered a period of performance release, and high stock orders drove the company’s future performance to continue to grow.

The company’s newly signed contracts will grow by 11 each year from 2016 to 2019.

84%, 34.

87%, 52.

52%, 56.

7%, the company ‘s order growth is increasing. The newly added single scale and the average growth rate are far higher than the company ‘s revenue. At the same time, the company continues to increase its overseas business development efforts. The performance of overseas orders is outstanding. The proportion of overseas orders is 1 / 3 or so.

　　If overseas orders arrive as scheduled, it is expected to drive the company’s future performance to continue to grow rapidly.

　　Earnings forecast and rating: We raised the company’s earnings forecast and expect the company’s EPS for 2019-2021 to be 0.

63 yuan, 0.

80 yuan, 0.

97 yuan, the corresponding PE on January 17 closing prices were 10.
7 times, 8.
5 times, 7.

0 times, maintaining the level of “prudent overweight”.

　　Risk reminder: the macroeconomic downturn, the domestic chemical industry’s economic downturn, overseas orders fell short of expectations, large amounts of asset impairment risk, and exchange rate changes