China Chemical (601117): Orders with high cardinality are slightly subdivided, underestimation of safety margin is sufficient

China Chemical (601117): Orders with high cardinality are slightly subdivided, underestimation of safety margin is sufficient

Event description On June 11, the company issued an announcement on its business situation from January to May 2019, and the company signed a new contract value of 116 in May.

9.2 billion yuan.

Incident review The company’s newly signed contract value in May has shifted slightly.

As of the end of May 2019, including the announced major contracts, the company gradually signed a new contract value of 575.

0.7 million yuan, the average ten years is 5.


Of which the domestic contract amount is 325.

86 ppm, an increase of 3 per year.

76%, overseas contract value is 249.

21 ppm, with a ten-year average of 16.

22%; cumulative operating income of 300.

75 ppm, an increase of 15 per year.


Judging from the single-month data, the company’s new contract value in May was 116.

92 ‰, 58 years ago.

72%, of which domestic contract value is 54.

87 ‰, an average of 32 in ten years.

43%, overseas contract value 62.

50,000 yuan, a ten-year average of 69.

29%; operating income for the month was 62.

82 ppm, an increase of 5 per year.


The new signings are mainly from large overseas contracts in the same period last year.

Overseas engineering projects usually have the characteristics of single-scale expansion and contraction, thus forming a certain interference with the company’s short-term order growth rate.

In May last year, the company’s federal gold infrastructure EPC project and solid oxide power generation project with a maximum value of 19.4 billion US dollars led to a relatively high current base and eventually led to a decrease in the number of new contracts signed in May this year.

The US $ 34.5 billion Russian petrochemical project agreement may help the company to follow up with new overseas signings.

On June 6, the company announced a framework agreement for a large-scale petrochemical project in Russia. The main content 深圳桑拿网 of the project includes exploration and drilling of oil and gas fields, infrastructure construction and oil plant process equipment.

The company plans to participate in the construction of key equipment such as oil terminals, oil pipelines, power stations, on-site roads, and on-site comprehensive facilities. The total price of the EPC contract is about US $ 5 billion, or about RMB34.5 billionThe calculation of the central parity rate of exchange rate) accounted for 23 of the company’s new year in 2018.


If the project is successfully implemented within the year, it is expected to help the company’s subsequent overseas breakthroughs.

Ample orders guarantee a steady growth in performance, and it is estimated that the safety margin at the low level is sufficient.

The company’s single-year total of 1,450 trillion in the new year of 2018 hit a record high, exceeding the growth rate by 53%, and ample orders are the replacement basis for future performance growth; the current PB estimate is only 1.

02 times, located in the bottom area since listing (6.

4% quantile level), the margin of safety is sufficient.

We expect the company’s EPS in 19-20 to be 0.

46 yuan, 0.

58 yuan for 1, corresponding to 2019/06/11 the implementation of PE is 13.
60 times, 10.
84 times, maintain “Buy” rating.

Risk Warning: 1.

Profitability budget risk; 2.

Risk of asset impairment loss caused by exchange rate fluctuations.