Wanhua Chemical (600309): The listing price remains unchanged in February, and domestic demand has shifted back to production in the short term due to epidemic situation

Wanhua Chemical (600309): The listing price remains unchanged in February, and domestic demand has shifted back to production in the short term due to epidemic situation

Company status The company announced the listing price of MDI in February 2020. There was no change in the previous month. The listing price of the aggregate MDI distribution market in China was RMB 13,500 / ton, the listing price in the direct sales market was RMB 14,000 / ton;

In order to fight the epidemic, the company donated 5 million yuan in cash to the Hubei Red Cross, 天津夜网 and urgently purchased 10,000 sets of medical protective clothing, which were donated to relevant institutions for front-line protection.

At the location of the company’s headquarters, the company took the initiative to apply for continuous supply of disinfectant to Yantai City for free during the epidemic period, and fully supported the epidemic prevention and control.

Comments on the normal start of MDI installations, the epidemic mainly affected downstream delays in start-up and disruption of logistics and transportation.

The company announced that the listing price in February was unchanged from January. The pure MDI market price was 15,500 yuan / ton. The aggregate MDI market price was 13,200 yuan / ton, which was flat compared with that before the Spring Festival. The price in the same period of 2019 was -26% / 3%.

The company’s MDI plant is non-stop for a short period of time. The Ningbo MDI plant resumed production on January 14 after maintenance. The current overall operating rate is about 80%. Foreign employees return to work after 14 days of isolation.

Inventory rose slightly due to the off-season of the Spring Festival.

We expect that the main impact of the epidemic will lie in the short-term backward movement of demand and the transfer of logistics transportation caused by the delayed start of domestic downstream footwear and apparel, household appliances and other enterprises. The current distribution market is light, and production and overseas sales have no impact.

Affected by the fluctuation of international crude oil prices, the average market price of raw benzene for raw materials was 5,800 yuan / ton, which replaced 2 before the holiday.

5%, weak cost-side support.

We expect the 2Q epidemic to improve. With the start of recovery and steady growth policies catalysing, the demand for early suppression will be concentrated and product prices are expected to rebound.

Petrochemical platforms continue to ramp up and large ethylene projects are expected.

The first phase of the company’s ethylene project mainly includes a 100 mg / year ethylene combined plant, 40 mm / year PVC, 15 ethylene oxide, etc. The second phase of the project will use naphtha and mixed butane as raw materials.The cracking unit produces carbides, aromatics and downstream products. We expect the company’s product structure to continue to be optimized and the anti-distortion enhanced.

It is estimated to maintain the company’s profit forecast for 2020/2021104.

4/127.

6/144.

0 million yuan, corresponding to 11 in 2020/2021.

9/10.

The price-earnings ratio is 6 times. We maintain our Outperform 杭州桑拿网 rating and maintain a target price of 58 yuan, corresponding to 14 in 2020/2021.

2/12.

The price-earnings ratio is 7 times, which is 20% compared with current expectations.

The duration and severity of the risk epidemic exceeded expectations, crude oil prices fluctuated sharply, and downstream demand was weak.

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