Chemical Leader Wanhua Chemical (600309) Series 2: Petrochemical Project Competition Analysis
In the next two years, Wanhua’s main investment will focus on petrochemical projects, and this period will also usher in an outbreak of domestic petrochemical capacity.
With all kinds of competition, is Wanhua’s petrochemical project competitive?
Our analysis is as follows: The core point of view has a leading edge in a series of chemicals: Wanhua’s propylene and ethylene projects have adopted chemical routes, and the gradual processing volume will reach more than 300 in the future.
Initial chemicals are favored by domestic enterprises due to their readily available raw materials, good long-term economics, and better suitability for product construction.
Moreover, we believe that the long-term chemical specific gravity is in the naphtha split or reformation, the external purchase of the product has cracks, the slender ratio is more flexible, and the investment intensity is greater, which is actually more suitable for Wanhua’s current industrial development needs.
The upstream and downstream layout is the best: Although domestic production has grown rapidly in recent years, the downstream supporting facilities are relatively single, resulting in very large changes in profitability.
Wanhua’s downstream facilities are relatively scattered, which effectively reduces the impact of a single product boom on overall profitability.
The reason why it can achieve differentiated competition for downstream products depends on technological innovation (PO) and industrial chain coordination (PVC).
We expect that in the future, the prosperity of petrochemical products under the impact of large-scale refining and chemical expansion will generally change, and Wanhua’s PO and PVC will still be able to obtain substantial profits.
Industrial chain extension to enhance antioxidants: Wanhua’s positioning for petrochemical projects is to provide stable and controllable basic raw materials for the polyurethane and new materials sectors. Therefore, most of the complementary products are matched with downstream business units.
With the development of Wanhua’s downstream business unit in the future, these petrochemical products are expected to be converted into differentiated products for export in the system.
Based on the indicators of R & D expenditure, patents, and other indicators, we believe that Wanhua is expected to continue to grow and strengthen in downstream areas such as new materials, so as to compete with domestic bulk companies.
Financial Forecast and Investment Suggestions We forecast the company’s total EPS to be 3 in 19-21.
60 and 4.
24 yuan, according to the company’s 19 times 19 武汉夜网论坛 times price-earnings ratio raised to 49.
2 yuan (the original target price of 45.
6 yuan) Maintain BUY rating.
The risks indicate macroeconomic risks, risks of fluctuations in crude oil prices, risks of new project progress, and breakthroughs in MDI industry barriers.