Yantai Wanhua: Future Ltd Composite Growth Rate Will Maintain 30-40%

The price of MDI has been rising steadily. Shanghai Lian Heng has been driving unnaturally. At present, it has not been opened yet. In the first half of the year, there are more international device overhauls. Meanwhile, after 3 and April, demand began to enter the peak season, resulting in relatively tight domestic supply. Recently, the price of MDI began to rebound, and the resilience of polymerized MDI was relatively large.

International oil prices are picking up, raw material prices are rising, and the supply of MDI is tight. We believe that the price of MDI will keep rising steadily in 2007.

Theoretically, the gross profit margin of MDI products will also increase.

The company's capacity will continue to expand. In 2007, Wanhua plant in Ningbo will expand from 160 thousand tons to 300 thousand tons, and the Yantai plant will also be able to expand to 14-15 million tons, and production capacity will increase by about 40%.

In 2008, the expansion of the plant this year will reach 100% by 2008.

In 2009, Ningbo Wanhua two phase 300 thousand tons will be put into operation.

Earnings forecasts and ratings are expected to be 1.01 yuan, 1.30 yuan and 1.76 yuan in 2007, 2008 and 2009 respectively.

According to the current stock price, the dynamic price earnings ratio of the company was 34.64 times in 2007, slightly higher than the average dynamic price earnings ratio of the high quality companies, but considering the company's definite growth, we continued to buy the rating.