华鲁恒升：产品基本面将受益于化工行业的反内卷

Summary of Hualu-Hengsheng Conference Call Company Overview - Company: Hualu-Hengsheng - Industry: Coal-based chemicals - Main Products: Urea (1.8 million tons per annum), DMF (250,000 tons per annum), acetic acid (500,000 tons per annum), hydrogen nitrate (600,000 tons per annum), polyol (750,000 tons per annum) [12][12] Key Points Industry Dynamics - Caprolactam Price Recovery: As of December 24, 2025, the market price of caprolactam was Rmb9,475 per ton, reflecting an 18% increase since early November due to producers limiting production to stabilize market expectations [2][2] - Urea Capacity: Domestic obsolete urea capacities are estimated to account for 10-12%, suggesting potential benefits for urea fundamentals from industry anti-involution [2][2] Profitability Outlook - Product Spreads: Current spreads for key products (urea, acetic acid, DMF, caprolactam) are at 10-year percentiles of 8%, 29%, 8%, and 15% respectively. Expected improvements in profitability for 2026 include: 1. Caprolactam spread improvement due to moderated supply growth and strong pricing willingness from producers 2. Stabilization of acetic acid and DMF profitability at trough levels amid slowing capacity additions 3. Urea profitability benefiting from exports and potential exit of obsolete capacities [3][3] Growth Drivers - Medium and Long-term Earnings Growth: 1. Recovery in product profitability driven by industry self-discipline and anti-involution measures 2. Incremental profit from the Jingzhou project, with Phase II ramping up capacity and Phase III planning TDI capacity of 300,000 tons per annum [4][4] Valuation and Ratings - Price Target Increase: Price target raised from Rmb32.1 to Rmb36.1, with a "Buy" rating maintained. The chemical industry has been re-rated due to enhanced self-discipline and price hikes [5][5] - Earnings Forecasts: 2025-2027 earnings estimates increased by 1-5%, with medium-term ROIC lifted from 15% to 18% [5][5] Financial Metrics - Market Capitalization: Rmb65.4 billion (approximately US$9.32 billion) - Current Share Price: Rmb30.79 as of December 24, 2025 - 52-week Range: Rmb30.79 - Rmb19.88 - Average Daily Volume: 18,217,000 shares [6][6] Earnings Projections - EPS Estimates: - 2025E: Rmb1.54 (up 1% from previous estimate) - 2026E: Rmb2.22 (up 5%) - 2027E: Rmb2.78 (up 5%) [7][7] Risks - Potential Risks: Include weakening demand for coal chemical products, reduced cost competitiveness in low oil price environments, and faster-than-expected new urea capacity launches leading to oversupply [13][13] Conclusion - Hualu-Hengsheng is positioned to benefit from industry recovery and strategic project developments, with a positive outlook on profitability and valuation adjustments reflecting improved market conditions.