Yantai Wanhua: Capacity Expansion &Nbsp, Usher In Demand Season

Company implementation in 2009 Do business The income was 6 billion 493 million yuan, a year-on-year decrease of 15.72%, a total profit of 1 billion 450 million yuan, a decrease of 30.09% over the same period last year, a net profit of 1 billion 66 million yuan attributable to the owners of the parent company, a decrease of 31.15% over the same period last year, and a 0.64 yuan earnings per share. Each 10 shares are distributed 3 yuan in cash dividends (including tax).

MDI price reduction makes the company's operating income lower than that of the previous year. In 2009, the average price of pure MDI and aggregated MDI was 18108 yuan / ton, 15533 yuan / ton, respectively, which decreased by 27.30% and 31.22% respectively compared with the same period last year. The reduction in price led to a 15.72% decrease in business income in 2009.

The company's capacity is expanding. At present, the company has a capacity of 500 thousand tons / year. Ningbo The two phase will reach 800 thousand tons after commissioning. After the commissioning of the company's relocation project, the MDI production capacity will reach 1 million 200 thousand tons, from the current world fifth to second.

2010 building energy saving plan is expected to come out, polyurethane insulation board market Great potential. At present, domestic polyurethane (MDI is an important raw material for polyurethane) accounts for less than 10% of the market share of building insulation materials, while the proportion of developed countries in Europe and the United States accounts for more than 50%. Polyurethane has superior performance and wide prospects in terms of thermal conductivity and flame retardancy. If the new and renovated building reaches 65% of the energy standard, if polyurethane occupies the market share of 30% of the whole new and retrofit energy efficient buildings, then the aggregate demand for MDI will be 270 thousand tons, which is about 28% of the domestic demand in 2009, and the market potential is huge.

In April, the MDI listing price rose sharply to meet the peak demand season. In April, the listing price of MDI and pure MDI was 18000 yuan / ton, 19400 yuan / ton respectively, 800 yuan and 1000 yuan respectively higher than last month. Polymerized MDI is mainly used in the field of thermal insulation, such as refrigerators, solar water heaters, cars, etc., with the coming of the demand season, prices are expected to rise. Pure MDI is mainly used for spandex, sizing and so on, which is closely related to textile and clothing. At present, domestic demand for textile and clothing is strong. Export data in the first two months of this year also indicate that external demand is good. We believe that the demand will improve the price of pure MDI.

Earnings forecasts and ratings. We expect the company's EPS in the 2010-2011 year to be 0.86 yuan and 1.09 yuan, calculated at the closing price of 23.94 yuan in April 6th. The corresponding dynamic price earnings ratio is 28 times and 22 times. Considering that the company has the concept of energy conservation and insulation, the technology has obvious advantages and the business scope is gradually expanding to maintain the company's "overweight" investment rating.

Risk warning. (1) there is price fluctuation risk in products and raw materials; (2) in the next two years, the domestic MDI capacity will be put in more, and there is a risk that the downstream can not be completely digested: (3) the policies and measures for building energy conservation will not meet the anticipated risks.