Polyfluoro (002407) annual report comment: bad debt accrual results decline in 2019 business recovery is expected

Annual report income 39.

4.5 billion, net profit attributable to mother 0.

The 6.6 billion company released its 2018 annual report: it achieved operating income in 2018 of 39.

4.5 billion (+4.

70%); net profit attributable to mother 0.

6.6 billion (-74.

30%); net profit after deduction is -0.

10 ppm (-105%); gross margin is 26.

26% (+ 1% year-on-year.

84pct).

The management expense ratio / sales expense ratio / financial expense ratio are 11 respectively.

47% (+2 YoY).

75 points) / 4.

25% (+0 year-on-year.

85pct) / 2.

80% (+0 year-on-year.

89pct).

Preliminary contradictions in the company’s performance: (1) Accrual of bad debt provision for receivables of Zhidou Company1.

38 trillion; (2) Expansion of the stock incentive plan in 2017 and one-time termination and repurchase reset accelerated accrual of budgeted costs 0.

7.6 billion.

The traditional fluorinated salt faucet is solid and stable. Electronic hydrofluoric acid is cut into semiconductor grade. In 2018, the company sold 27 molecules of fluorinated salt, hydrofluoric acid (including ordinary hydrofluoric acid and electronic grade hydrofluoric acid) 4.

2 Nominal, ranking firmly in the global leader level.

The quality of the company’s electronic grade hydrofluoric acid has improved, reaching UPSSS level, successfully entering the semiconductor market and exporting to South Korea. It has developed many customers such as South Korea’s Xiubo Ruiyin, Samsung Products, Chongqing Super Silicon, Chongqing Texas Instruments, Shanghai Huali Microelectronics,There is plenty of room for import substitution in the future.

The production and sales of lithium hexafluorophosphate are booming, and the market share ranks first. At the end of 2018, the company has an annual production capacity of 6,000 tons of lithium hexafluorophosphate, and the production and sales of 5,440 tons in 2018, ranking first in the industry.

The company plans to reach a capacity of 10,000 tons by the end of 2019, and continue to consolidate the industry’s leading similar companies.

The company merged the vertically integrated industrial chain of lithium hexafluorophosphate, which increased the production capacity and had cost advantages.

The company’s lithium hexafluorophosphate has an excellent customer structure. Domestic customers include BYD, Shanshan, Xinzhoubang, etc., and overseas customers include Mitsubishi, Mitsui, Ube, LG, etc.

Maintaining the “Recommended” rating company is the global leader in lithium hexafluorophosphate, with both process and cost advantages, and the actual output ranks first in the world, benefiting from the price increase of lithium hexafluorophosphate.

Each increase in the average tax-included price of lithium hexafluorophosphate by 1 million tons / ton can increase the company’s net profit attributable to its parent by 58 million yuan.

Affected by the decline in the price of some fluorinated salt products, we adjusted our profit forecast and estimated that the company’s net profit for 2019-2021 will be 3 respectively.

35 (-0.

22), 4.

08 (-0.

34) and 4.

6 billion.

The current anniversary corresponds to a PE of 32, 26 and 23 times for 2019-2021.

Maintain the “Recommended” level.

Risk Warning: Downstream Demand Is Less Than 杭州夜生活网 Expected, Lithium Hexafluorophosphate Price Fluctuation Risk, Policy Risk