Hengli Petrochemical (600346) In-depth Report IV: Analysis of the profitability of private refining and chemical industry from the perspective of ROE and ROIC
Core point one, why are the ROE and PB of Hengli refining and chemical projects so high?
According to estimates, the ROE of Hengli Refining & Chemical Project is 32.
4%, PB is 3.
24 (assuming PE is 10 times).
According to DuPont analysis, the reason is the higher equity multiplier (equity multiplier = 2).
78), that is, companies have the ability to obtain large loans to increase leverage.
The fundamental reason is to respond to the government’s call and follow the trend of the times. The company has good qualifications and has received strong support from the government and banks.
Second, what is the actual return on investment (ROIC) of Hengli Refining & Chemical project?
The ROIC of the current Hengli refinery project is 14.
5%, better in the industry.
By measuring the present value of future cash flows of long-term operating activities, the non-principal and interest repayment present value, we believe that Hengli Refining & Chemical projects have cash flow wealth and debt 南京夜网论坛 risk burden.
Third, what money is made by private refining (1) Money that earns equity multipliers: the ability to obtain low interest rates and high loan amounts (2) Money that earns net interest rates: Product structure, low operating costs, excess profit profit forecastAnd the risk reminder predicts that the company’s net profit attributable to the mother in 2019/20/21 will be 94.
900 million, PE is 11.
4 times, maintaining “strongly recommended” level.
Risk warning: the actual cost of oil price increases; downstream demand is less than expected; project construction progress is less than expected; changes in downstream product prices; and relevant national policies are significantly adjusted.