\u3000\u3000 Xinjiang Zhongtai Chenical Co.Ltd(002092) (002092)
Event: on February 17, the company released its annual report for 21 years. The company’s revenue in 21 years was 62.463 billion yuan, yoy-25.83%, and the net profit attributable to the parent was 2.703 billion yuan, yoy + 1769.96%, which was close to the upper limit of the notice. Considering that the company completed the disposal of 60% equity of Shanghai Duojing in April, it had a great impact on the revenue. If the trading business was excluded, the operating revenue in 2021 was 28.569 billion yuan, yoy + 58.47%. In a single quarter, Q4 company achieved a revenue of 20.222 billion yuan, yoy + 5.19%, and a net profit attributable to the parent company of 238 million yuan, yoy-59.78%, qoq-67.41%. The company’s annual accrued asset impairment mainly occurred in Q4, including asset impairment of 125 million yuan and credit impairment of 121 million yuan, which affected the single quarter profit of Q4.
On February 7, the company disclosed the asset restructuring plan and planned to purchase 75.89% shares of MEC chemical by issuing shares and convertible bonds. Before this transaction, the company held 24.11% shares of MEC chemical. After this transaction, MEC chemical will become a wholly-owned subsidiary of the company. Since the evaluation value and proposed price of the target assets of this transaction have not been determined, the payment proportion and quantity of shares and convertible corporate bonds of each counterparty in this transaction have not been determined.
As a leading PVC enterprise in China, the company has the capacity of pvc2050000 tons, 1.46 million tons of ion-exchange membrane caustic soda, 730000 tons of viscose fiber, 2.7 million spindles of viscose yarn and 2.8 million tons of calcium carbide. The upstream and downstream integrated circular economy industrial chain of coal, thermoelectricity, calcium carbide, chlor alkali, viscose fiber and viscose yarn has obvious integration advantages. In addition, the company is located in Xinjiang, Northwest China, with rich coal, limestone and other resources. It has more obvious advantages in cost and strong industry competitiveness. The company continues to optimize its core assets, divest its trade-related businesses and focuses on its core chlor alkali business, with strong performance flexibility.
The simultaneous rise in the volume and price of main products has led to a significant increase in the company’s performance: the substantial growth in the company’s performance in 21 years is mainly due to the simultaneous rise in the volume and price of main products. As for the main product PVC, in the first half of 21 years, due to the impact of the cold wave in the United States, the commencement of PVC devices was limited, the global supply was tight, and the PVC market price continued to rise. In the second half of the year, driven by the “dual control” of China’s energy consumption, the prices of raw materials such as calcium carbide continued to rise, the cost of PVC increased significantly, and the market price hit a record high. In 21 years, the average price of PVC reached 7762 yuan / ton, yoy + 31%, and the sales volume increased by 10.99% year-on-year to 1.899 million tons. The average prices of viscose yarn, viscose fiber and caustic soda of other products are 13983 yuan / ton, 10776 yuan / ton and 1872 yuan / ton respectively, yoy is + 32%, + 40%, – 13% respectively, and the sales volume is 303300, 2674 and 947100 tons respectively, yoy is + 29%, + 2% and + 5% respectively. With the continuous promotion of carbon neutralization, the company’s main products are expected to be prosperous for a long time.
Optimize core assets and enhance profitability: in April 21, the company completed the disposal of 60% equity of Shanghai Duojing, further stripped off trade business, optimized core assets and improved the profitability of the company. In 21 years, the gross profit margin of the company reached 13.90%, with a year-on-year increase of 8.17pct. In the follow-up, the company is building Jinhui Zhaofeng 750000 T / a calcium carbide project, which will further improve the company’s industrial chain and improve profitability. MEC chemical is the leader of BDO in China, with a capacity of 270000 tons / year. In 21 years, it has realized a net profit of 1.795 billion yuan. At present, there is still 100000 tons of BDO capacity under construction and is expected to be put into operation in October of 22 years. The company’s subsequent planning of 180000 tons of PBAT capacity will enhance the company’s synergy and help the company grow in the field of fine chemicals.
Profit forecast: the company is expected to realize a net profit of RMB 4.76/49.7/5.29 billion in 2022 / 2023 / 2024, yoy + 22% / + 28% + 13%, equivalent to EPS of RMB 1.28/1.65/1.86. At present, the PE corresponding to the A-share price is 8 / 6 / 6 times. The company has obvious cost advantages and excellent profitability, and maintains the “buy” rating.
Risk tips: 1. The product price is lower than expected; 2. Asset restructuring is less than expected.
