Hangzhou Oxygen Co., Ltd. (002430): Accelerating market development of gas projects

Hangzhou Oxygen Co., Ltd. (002430): Accelerating market development of gas projects

The pioneers of the industrial gas landscape are accelerating. They are optimistic about the company’s medium- and long-term sustainable development potential. The company issued Announcement 2020-003 to expand the gas supply contract with Yangxin Hongsheng. It plans to set up a wholly-owned subsidiary with its own funds-Huangshi Hangyang Gas Co.The company, and a new set of 35,000m3 / h and a 25,000m3 / h air separation unit under its responsibility will supply Yangxin Hongsheng with industrial gas products needed for its production.

After the company’s cash flow cycle is gradually optimized, it will increase the development speed of the industrial gas business, continue to improve the competitiveness of the industrial gas, gradually reduce the transformation of the air separation equipment business, and implement the company’s strategy steadily. We are optimistic about the company’s sustainable development potential and sustainable profit forecast.Expected 2019?
EPS is 0 in 2021.



11 yuan, maintain “Buy” rating.

  Yangxin Hongsheng gas supply contract was quickly signed, and the company’s project promotion capability exceeded the company’s announcement No. 2019-069 on November 24, 2019. The company announced that it had won the bid for Yangxin Hongsheng Copper to produce “400kt / a high-purity halogen copper clean oxygen and nitrogen.And other industrial gas supply and service projects. ”

  Only 47 days apart, the company announced on January 10, 2020 that it had officially announced a gas supply contract with Yangxin Hongsheng Company on January 10, 2020. The board of directors has approved the “Investment and Establishment of Huangshi Hangyang Gas Co., Ltd.”Expectations for Air Separation Plant Projects”, the project has entered the preliminary stage, which reflects the company’s alternative project promotion capabilities.

  Gas business expansion measures have been intensively implemented. Retail gas and centralized gas supply have gone hand in hand. Since January 1, 2019, the company has announced five new gas supply projects with a total gas supply scale of 240,000 m3 / h.

In 2019, 杭州桑拿网 the company established 4 regional gas sales companies, initially established an electronic gas supply contract and the first “many-to-many” model gas supply contract. Retail gas and centralized gas supply business expansion went hand in hand.

We believe that the company’s recent concentrated gas supply contracts are rapidly spreading, the market development is gradually accelerating, and the gradual increase in the “quantity” signifies that the company’s industrial gas business competitiveness continues to increase; alternatives, industrial park gas supply and one-to-many gas supply contractsThe gradual manifestation of the development of the company’s industrial gas business model has entered a more mature stage. One-to-many gas supply and one-to-one gas supply have more regional concentration, intensiveness and more obvious scale effects, and gradually promote the improvement of the company’s profitability.

  The company’s strategy has been implemented steadily, and business stability has been continuously improved. The scale of the industrial gas business of the company with a “Buy” rating is expected to continue to expand and expand. The decrease in the proportion of equipment business income will weaken its development impact on the company ‘s performance;It is expected that the successive operations will effectively hedge the disturbance of income and profits caused by changes in retail prices and improve the stability of the business counter-cycle.

  The company has abundant cash flow, is optimistic about the company’s medium and long-term growth potential, and maintains its profit forecast. Is it expected that 2019?
The 21-year return to mother’s net profit was 7.



700 million, corresponding PE is 18/15 / 12x.

The average PE of a comparable company in 2020 is 15x. Considering the company’s leader and continuous weakening, given a target PE of 2020?
20x, corresponding to 15.


15 yuan.

  Risk reminders: downside risks of rising retail gas prices; new projects put into operation are less than expected; downstream industries such as chemical and metallurgical industries exceed expected downlinks; modern coal chemical projects are less advanced than expected; emerging downstream developments such as semiconductors are less than expected.