Hengyi Petrochemical expects its first quarter net profit to grow 44% to 67%

On April 3, Hengyi Petrochemical (000703) issued the performance forecast. The company expects that the net profit attributable to the shareholders of the listed company from January to March 2018 will be 650 million to 750 million, a year-on-year change of 44.41% to 66.62%, and the average net profit growth rate of the chemical synthetic material industry will be 19.59%. The company makes the above prediction based on the following reasons:

During the reporting period, the company's polyester industrial chain boom continued. In particular, the company's main product, purified terephthalic acid (PTA), benefited from the improvement of the industrial structure, the clearing of backward production capacity and the sharp slowdown of new production capacity. At the same time, the downstream demand is strong, the company's PTA product benefits continue to recover, and it is in a steady upward stage, making a greater contribution to the company's profits.

Influenced by downstream nylon demand growth and environmental protection and production restriction of small and medium capacity of caprolactam, the nylon industry chain rapidly ushered in a recovery cycle. The company's caprolactam (CPL) product quality is excellent, processing costs continue to reduce, and business profitability is significantly enhanced.

During the reporting period, the company enhanced the coordination ability of production and operation, increased the implementation of intelligent production, data-based operation and Internet marketing, fully transformed and utilized the big data through the main links of production, sales and management, and realized the continuous reduction of production and operation costs, accurate positioning of inventory and market, continuous optimization of product structure, and significant business benefits. At the same time, the company continues to steadily promote the integration of the industrial chain, to achieve a more balanced development of the upstream, middle and downstream industrial chain, and the leading advantage is more significant.

The performance forecast does not include the contribution of the assets to be injected to the company's performance. Driven by the above favorable factors, the company's first quarter profit in 2018 is expected to increase by 44.41% - 66.62% compared with the same period last year, with a profit range of 650 million yuan – 750 million yuan.