How Strong Is Profitability? Tong Kun Shares Expect Net Profit To Be Close To 3 Billion In 2019.

The Limited by Share Ltd of Tong Kun group (hereinafter referred to as "Tong Kun") announced in the evening of January 15th that it expects the net profit in 2019 to be 2 billion 800 million yuan to 3 billion yuan, an increase of 32% to 41% over the same period last year.


For the company's performance changes, Tong Kun shares explained that during the reporting period, the purified terephthalic acid and polyester fiber industry continued to maintain orderly competition, and the gross margin of products remained at a good level. The production of new projects increased year by year, compared with 2018, while the company continued to improve its institutional and organizational structure, increase investment in product innovation and intelligent manufacturing, further optimize its product structure, further improve its production efficiency, and significantly enhance its business profitability. The overall efficiency increased substantially compared to the same period in 2018.


Guo Jin securities analyst Xu Junyi said earlier that as the leading producer of POY filament production capacity, Tong Kun shares significantly benefited from the strong price difference of polyester POY and had greater profit elasticity. The weaker structure of FDY and DTY has relatively little impact on the company, because the FDY and DTY of Tong Kun share are relatively low in the product mix.


According to the financial report, in the four quarter of 2019, Tong Kun added 600 thousand tons / year filament production capacity, and the production capacity of the filament will reach 6 million 600 thousand tons by the end of 2019. In the three quarter of 2019, the total sales volume of Tong Kun polyester filament reached 4 million 196 thousand and 900 tons, up 28.89% over the same period last year. The annual sales volume of the filament is estimated at about 520-550 million tons. It is estimated that demand for filaments will grow by 5-7% in 2019, and the strength of Tong Kun's stock will continue to strengthen. As polyester manufacturers stop production and maintenance, downstream replenishment at the end of 2019, filament prices and profits stabilized and picked up.


At present, Tong Kun shares PTA capacity of 3 million 700 thousand tons, PTA can achieve self-sufficiency. Meanwhile, Tong Kun plans to invest 16 billion yuan to build a new petrochemical polyester integrated production base in Rudong, Jiangsu, with an annual output of 2*250 million tons of PTA, 900 thousand tons of FDY and 1 million 500 thousand tons of POY capacity. Among them, the first phase of the project invested 12 billion yuan, the new capacity of 2*250 million tons PTA, 300 thousand tons of FDY, 900 thousand tons of POY, the fastest is expected to be put into operation at the end of 2022; the two phase of investment is 4 billion yuan, 600 thousand tons of FDY, 600 thousand tons of POY, while the construction of coal-fired cogeneration projects. After the completion of the project, the leading position of the company will be further consolidated.


Xu Junyi pointed out that taking into account the serious shortage of market expectations for Zhejiang Petrochemical, it is expected that after the completion of Zhejiang Petrochemical Company, Tong Kun shares significantly benefited from the investment returns of Zhejiang Petrochemical refining and chemical assets. And the existing PTA- filament assets of Tong Kun share can maintain better profitability in the background of the continuous improvement of the concentrating degree of the polyester industry's head enterprises.