MDI price increases encountered maintenance, Wanhua Chemical 2020 can continue to create 10 billion net profit?

is expected to further improve its performance due to the increase in MDI (diphenyl methane diisocyanate)However, the enterprise at this moment announced a shutdown and overhaul, the first quarter of this year Wanhua attributable to the listed company shareholders net profit decreased by 50.74 percent year-on-year, asset-liability ratio also rose to 57.89 percent, combined with the market environment in the first half of the year, has to let people on Wanhua Chemical in 2020 to achieve a billion billion net profit again a question markrecently, Wanhua Chemical announced that, according to the annual maintenance plan, the company Yantai Industrial Park MDI plant (600,000 tons / year), TDI plant (300,000 tons / year) will start on July 1, the maintenance is expected to be about 45 daysfor this overhaul, Wanhua Chemical said, in order to ensure the safe and effective operation of production equipment, this shutdown overhaul is based on the annual plan for routine maintenance, the company's production and operation will not have an impactHowever, affected by this news, Wanhua Chemical opened lower on June 15, closing the day at 47.16 yuan per share, down 2.76%However, on the 16th, Wanhua Chemical closed at 48.25 yuan per share, up 2.31%, with a total market value of 151.493 billion yuanthe outbreak, oil price impact performance
since it is a routine overhaul, Why is Wanhua Chemical this move of concern? Why are shareholders worried? This also has to start from the enterprise's half-year experiencein the chemical industry, Wanhua Chemical is known as the chemical industry's "Huawei." It was founded in 1998, since 2001, the main business from a single MDI to polyurethane, petrochemicals, new materials and functional chemicals and other sectorsIn August 2018, Wanhua Chemical absorbed the merger of Wanhua Chemical, a major asset restructuring project was unconditionally approved by the CSRC, transformed into a "world of Wanhua", surpassing BASF as the world's MDI giantknown as MDI is an important raw material for the production of polyurethanesPolyurethane is a new organic polymer material, known as the "fifth largest plastic", widely used in major production and construction fieldsAt present, MDI is the most important product of Wanhua Chemical, as China's only company with MDI manufacturing technology independent intellectual property rights, the world's largest MDI supplier, its MDI in the domestic market share of more than 40%, is the industry's leadingWith MDI's global leadership, between 2017 and 2019, the company achieved revenue of RMB64.844 billion, RMB 72.837 billion and RMB68.051 billion, and net profit attributable to shareholders of listed companies was RMB15.78 billion, RMB15.566 billion and RMB10.13 billionHowever, due to the high degree of dependence on MDI, in the first quarter of 2020, the global spread of the new crown epidemic on MDI domestic demand and exports have a greater impact, overlay the international crude oil pricesharp downward trend, aggregate MDI start load and market prices both fellWanhua Chemical's results showed a sharp decline, with revenue of RMB15,343 million, down 3.82% YoY, and net profit attributable to shareholders of listed companies to RMB1,377 million, down 50.74% YoYthe end of the first quarter, Wanhua Chemical is still not out of bad luck The price of related chemicals has fallen sharply as a result of the global oil price slump CICC's March report pointed out that the recent rapid decline in international oil prices has exceeded industry expectations, the overall price center of chemicals will follow the decline of crude oil Wanhua Chemical also twice announced a reduction in pure MDI listing price The prices from March to May are 18,700 yuan/tonne, 16,700 yuan/tonne, and 15,800 yuan/tonne MDI prices rose but stopped production
however, MDI price decline trend finally stopped in May It is reported that in April OPEC plus reached a production reduction agreement, the implementation of May 1, international crude oil prices rebounded strongly The rise in the price of Brent crude oil led to an upward price of pure benzene for MDI raw materials, giving mDI prices a boost. May 28, Wanhua Chemical announced that since June, the company's China polymer MDI distribution market listing price of 14,000 yuan / ton, direct marketing market listing price of 14,500 yuan / ton, are 500 yuan / ton higher than the May price; however, just after the impact of the outbreak of enterprises, oil prices, it is not easy mDI prices in June, enterprises are expected to raise eyebrows, but its Yantai Industrial Park MDI device, TDI device is to be overhauled in July That's a month later than some brokerages had expected As a result, some shareholders expressed concern about the second half of the enterprise production situation, but there are also shareholders think that "big may not be necessary." analysts believe that MDI production raw materials are strong acids and alkalis, the corrosion of production equipment is more serious, if leakage will cause extremely serious consequences, so The world's MDI manufacturers must stop production and maintenance every year Since this is a must-do work every year, manufacturers are also scheduled Such as in advance to increase inventory, to ensure the maintenance period of product supply Therefore, there should be no impact on full-year production on the other hand, as mDI leader, Wanhua Chemical has an existing MDI capacity of 2.1 million tons/year, of which, Yantai base is 600,000 tons/year But in addition to the Yantai base, the company's Ningbo base of 1.2 million tons / year, the Hungarian BC base 300,000 tons / year, they are in a state of maintenance to complete normal production With the outbreak under steady control, several countries in Asia, Europe and the Americas will gradually ease the blockade and show signs of starting economic activity And the domestic chemicalindustry downstream industry fundamentals are also gradually improving Influenced by the development of the western region, major construction projects, real estate completion cycle year after year, the demand level of the related chemical industry is increasing, MDI and polyurethane hard foam insulation materials, building adhesives and other industries are expected to appear "bottom rebound" phenomenon However, in the context of the epidemic, the risk to the market caused by changes in international and domestic patterns still exists has been a strong profitability of Wanhua Chemical in the positive return of shareholders and investors Yet investors are worried about 2020. this is first and foremost directly related to the company's performance this year Although Wanhua Chemical made a net profit of $10 billion between 2017 and 2019, the figure slowly declined In addition, as Wanhua Chemical continues to expand its production capacity, there is also a phenomenon of increased debt burden In March this year, the construction of the Trillion Hua Fujian Industrial Park, with a total investment of more than 50 billion yuan, was officially opened In August this year, the total investment of 40 billion yuan "Wanhua Chemical Southwest Base Project (Phase II)" will be opened again Choice data show that in 2018 and 2019, Wanhua Chemical's balance sheet ratio was 48.97 percent and 54.65 percent, but by the first quarter of 2020 it was 57.89 percent What was the performance of Wanhua Chemical in the second quarter of 2020 and the second half of 2020, and whether it could continue to generate a net profit of 10 billion yuan? We will continue to pay attention