Satellite Chemistry (002648)
Event: on January 28, 2022, the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will reach 5.7-6.3 billion yuan in 2021, with a year-on-year increase of 243.17% – 279.29%; The net profit deducted from non parent company was RMB 5.55-6.15 billion, with a year-on-year increase of 250.12% – 287.96%.
Benefiting from the commissioning of C2 chemical project, the company’s performance increased significantly. According to the calculation, the company expects to realize the net profit attributable to the parent company of 1.444-2.044 billion yuan in the fourth quarter of 2021, with an average of 1.744 billion yuan, which is much higher than the level in the same period of 2020, but lower than the profit in the third quarter of 2021. Throughout the year, the company’s high profit growth was mainly due to the good operation of each unit in the phase I project of the annual output of 1.35 million tons of PE, 2.19 million tons of EOE and 260000 tons of ACN combined unit project of the subsidiary Jiangsu Lianyungang Port Co.Ltd(601008) Petrochemical Co., Ltd. since it was put into operation on May 20, 2021; With the full production of C3 industrial chain phase I project in 2022, the profitability of the company is expected to continue to improve significantly.
Continue to expand C3 business and enhance the competitiveness of C3 field. By the first half of 2021, the company has the capacity of 900000 tons of propylene, 450000 tons of polypropylene, 1.71 million tons of acrylic acid and ester and 220000 tons of hydrogen peroxide; In addition, the company announced on March 20, 2021 that it plans to build 800000 tons of PDH, 800000 tons of butyl octanol, 120000 tons of neopentyl glycol and supporting devices, which are expected to be put into operation in 2024. At that time, the company’s C3 industrial chain capacity will be further increased, the industry leader position will be further consolidated, and the scale effect will gradually appear.
C2 projects have been put into operation one after another, and the growth space has been opened. According to the announcement, the first phase of the company’s Jiangsu Lianyungang Port Co.Ltd(601008) C2 project has been successfully started in May 2021, and all units operate well; The second phase of C2 project has entered the installation phase and is expected to be completed and put into operation in the middle of 2022. After being put into operation, it will significantly increase the company’s performance. In addition, relying on C2 and C3 industrial chain platforms and focusing on the new energy industry, the company plans to build battery grade vinyl carbonate (EC), dimethyl carbonate (DMC), diethyl carbonate (DEC), methyl ethyl carbonate (EMC) and other devices by the addition reaction of ethylene oxide and carbon dioxide in 2022. At the same time, the company uses a large number of by-product green hydrogen and hydrogen peroxide, which accounts for more than 50% of the market share of photovoltaic industry in Jiangsu and Zhejiang, so as to further expand the influence of hydrogen peroxide in semiconductor, photovoltaic and other industries.
It is planned to invest in the construction of industrial parks and accelerate the pace of transformation. The company plans to invest in the new green chemical new material industrial park project in Xuwei new area, which mainly includes an annual output of 200000 tons of ethanolamine (EOA), 800000 tons of polystyrene (PS) and 100000 tons α- Olefin and supporting Poe, 750000 T / a carbonate series production unit. The company continues to promote the extension of its business to the three fields of new materials, new energy and high-performance chemicals, and is committed to building a new low-carbon chemical material platform.
Investment suggestion: according to the performance forecast of the company in 2021 and the production progress of C2 project, we raised the net profit attributable to the parent company from 2021 to 2023 to 6 / 86 / 10.2 billion yuan, and the PE corresponding to the closing price on January 28, 2022 was 12 / 8 / 7 times. Considering the performance growth brought by the continuous production of C2 project, we maintained the “recommended” rating.
Risk warning: the risk of price decline of main products; Jiangsu Lianyungang Port Co.Ltd(601008) risk of slowing down the progress of the project.
