Wanrun Co. (002643) Company Comments: Interim Report Performance Steady Growth Due to Increased Internal Demand and Exchange Gains

Wanrun Co. (002643) Company Comments: Interim Report Performance Steady Growth Due to Increased Internal Demand and Exchange Gains

The steady growth of the interim report results is in line with expectations. The company issued a 2019 interim report forecast, achieving a net profit attributable to shareholders of listed companies of 1.

9.3 billion -2.

51 ppm, a year-on-year growth of 0-30%, performance growth in line with market expectations.

Reasons for performance growth: downstream demand growth, especially the increase in internal environmental protection material demand; RMB depreciation in the second quarter of 2019, the company’s exports accounted for nearly 80%, and the US dollar-based pricing, RMB depreciation brings considerable exchange gains, we expectForeign exchange earnings in the second quarter exceeded 10 million yuan.

The issuance of convertible bonds was terminated, but the built-in environmental protection materials project continued to advance in an orderly manner. Focusing on convertible bonds, it has been shown that the capital market environment has changed in order to fully protect the interests of shareholders, especially small and medium shareholders. The company comprehensively considers capital market conditions and financing opportunitiesFactors, decided to terminate the issuance of convertible bonds and withdraw the application documents.

We believe that the current price corresponds to the company’s 2019 PE estimate of only 17 times. At this time, the issuance of convertible bonds and excessive dilution of the company’s EPS after subsequent conversions will result in the company’s termination of the issue of convertible bonds in accordance with shareholders’ equity.

In addition, the termination of the issuance of convertible bonds will not affect the implementation of the company’s internal environmental protection material projects. The company will continue to promote the involvement of environmental protection material projects through self-raised funds.

The implementation of National VI for diesel vehicles, the growth of internal demand is worth looking forward to the implementation of National VI for diesel 杭州夜生活网 vehicles will significantly increase the demand for internal environmentally friendly materials. After full implementation in 2021, it is expected that the annual domestic demand will increase by more than one.

Backed by Johnson Matthey, the company is expected to fully benefit from the industry’s growth dividend.

In addition, the increase in diesel emission standards in emerging countries such as India and Brazil will also drive demand.

The company’s existing polycarbonate production capacity is 3350 tons, 2,500 tons are under construction, and it will continue to expand production by 7,000 tons.

With the successive construction and production of a series of environmentally-friendly materials projects, the company will become a high-end series of environmentally-friendly materials producers in the world in terms of technology and sales.

The OLED business enters the period of accelerated release of performance. The OLED business maintains a leading position in China. Its nine-mesh chemical is a leading supplier of domestic intermediates and monomers. In March Optoelectronics, there is a volume of finished materials certification for downstream customers.Earnings are rising rapidly and profitability is expected.

We believe that the OLED business is one of the most important businesses the company reserves after the power station business.

The company’s 2019Q1 minority shareholders ‘profit and loss was 563 million. Since March Optoelectronics is still in the heavy volume verification stage, the minority shareholders’ profit and loss are mainly contributed by Jiumu Chemical. Therefore, we believe that Jiumu Chemical’s 2019Q1 net profit has exceeded 10 million and the net profit marginImproved and continue to improve (Jinmu Chemical’s revenue in 20182.

360,000 yuan, net profit margin 23.19 million yuan, net profit margin 9.


The chemical growth in September exceeded expectations, and the volume of finished photovoltaic materials in the following three months, the company’s OLED business will enter a period of accelerated performance release.

Earnings forecast and investment advice: We expect the company’s net profit attributable to its parent to be 5 in 2019-2020.


400 million, the current price corresponds to 17 times PE in 2019, maintain BUY rating.

Risk warning: demand for environmentally friendly materials exceeds expectations, growth of OLED materials exceeds expectations, and liquid crystal demand exceeds expectations.