Wanhua Chemical Group Co.Ltd(600309) (600309)
Event: Wanhua Chemical Group Co.Ltd(600309) announced the listing price of MDI in China in December. Since December 2021, the listing price of the company’s aggregated MDI market in China is 21500 yuan / ton (1500 yuan / ton lower than the price in November); The listing price of pure MDI is 23800 yuan / ton (no change compared with November).
comment:
MDI prices callback in the off-season, and the prices are still in the comfortable profit range. As of November 26, 2021, the price of polymerized MDI was 19050 yuan / ton, The weekly ratio decreased by 350 yuan / ton (- 1.8%), and the monthly ratio decreased by 1650 yuan / ton (- 8.0%); the pure MDI price was 22150 yuan / ton, the weekly ratio decreased by 600 yuan / ton (- 2.6%), and the monthly ratio decreased by 2100 yuan / ton (- 8.7%). In terms of price difference, the aggregate MDI price difference was 13874 yuan / ton, the weekly ratio decreased by 30 yuan / ton (- 0.22%), and the monthly ratio decreased by 733 yuan / ton (- 5.0%); the price difference of pure MDI is 16974 yuan / ton, with a decrease of 280 yuan / ton (- 1.6%) on a weekly basis and 1183 yuan / ton (- 6.5%) on a monthly basis. Supply side, Wanhua Chemical Group Co.Ltd(600309) The 400000 T / a MDI phase I unit of (Ningbo) Co., Ltd. will be shut down for maintenance on November 27, and the maintenance is expected to be about 45 days; the 800000 T / a MDI phase II unit will be shut down for maintenance on December 11, and the maintenance is expected to be about 45 days; according to Baichuan Yingfu, Shanghai keschuang unit stopped for maintenance on November 15, and other units in China basically operate normally. Overseas, Germany keschuang unit Low load operation; The 350000 T / a unit of borsodchemmdi plant in Hungary had force majeure due to production failure on November 17; The remaining loads of other units operate at a high level, and the overseas supply is relatively sufficient. On the demand side, the downstream refrigerators and freezers are the largest downstream industry of China’s aggregated MDI. Large enterprises such as Haier, Hisense and Midea are mostly directly supplied by Chinese manufacturers, and their procurement methods are mostly bidding. The production peak of the refrigerator and freezer industry is generally about March; Affected by the severe cold weather, the overall construction of thermal insulation pipelines in northern buildings declined due to the commencement of plate, exterior wall, pipeline and other industries; In terms of pure MDI, the operating load of downstream spandex is 80-90%, the orders are followed up stably, the downstream TPU is about 50-60%, the sole stock solution and slurry are 30-40%, and the demand has not improved significantly. On the whole, MDI supply is normal, and the price correction in the off-season is in line with market expectations.
The U.S. housing market is booming, and MDI exports maintain growth. According to the latest data released by China Customs, in September 2021, China’s aggregate MDI export volume was 89700 tons, a year-on-year increase of 65.0%, It increased by 5.2% month on month (4444 tons more than the previous month). As the top three export destinations of China’s aggregated MDI, its exports to the Netherlands, the United States and Belgium accounted for 22.6% / 17.2% / 7.4% respectively in September. From January to September 2021, China’s accumulated exports of aggregated MDI were 786500 tons, a year-on-year increase of 79.4%. In October, the sales of existing homes in the United States (year-on-year) 6.34 million units, up 0.79% month on month, a nine month high. At present, the inventory in the U.S. real estate market is low and the price is high, but the housing sales may remain flexible. According to NAR forecast, the annual trading volume in 2021 is expected to be the highest since 2006. The U.S. real estate market helps the overseas MDI price to maintain prosperity. According to the customs data, the average export unit price of aggregated MDI in October is $2315.95 Yuan / ton, up 76.03% year-on-year. In September 2021, China’s net MDI export volume was 11900 tons, a year-on-year increase of 27.1%. Growth of 38.5% month on month. From January to September 2021, the cumulative export volume of China’s pure MDI was 91300 tons, a year-on-year increase of 34.2%. We analyze that overseas MDI devices are generally old, and the power and supply chain system are fragile. Under the influence of extreme weather, epidemic and other factors, the probability of force majeure of overseas devices still exists, and MDI exports are expected to continue to grow at a high rate.
Fujian is expected to copy the Yantai model and is optimistic about the demand increment of building insulation for a long time. According to the EIA announcement of Wanhua Chemical Group Co.Ltd(600309) (Fujian) project with an annual output of 1.08 million tons of aniline issued by the Management Committee of Fuzhou Jiangyin Port City Economic Zone, Wanhua Fujian Industrial Park plans to expand the MDI project to 1.6 million tons / year (Wanhua isocyanate company), in the later stage, it will continue to build large-scale coal gasification projects and supporting auxiliary utilities. In the future, Wanhua Fujian will become the third largest MDI production base after Yantai and Ningbo. Wanhua Ningbo plans to expand the production capacity of phase I MDI unit from the existing 400000 T / A to 600000 T / A, and the production capacity of phase II MDI unit from the existing 800000 T / A to 1.2 million T / A. in the future, Wanhua MDI city will The market share and competitiveness are expected to continue to improve. Green low-carbon building materials, including polyurethane building thermal insulation materials and polyurethane composite energy-saving doors and windows, are the focus and R & D direction of Wanhua, which is expected to bring incremental space for polyurethane demand; Under the trend of lightweight and large-scale wind power blades, polyurethane has obvious advantages over epoxy resin. Under the background of promoting the “double carbon” target policy, the installed capacity of wind power continues to grow, and polyurethane materials have broad prospects.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2021 to 2023 will be 25.83 billion yuan, 29.62 billion yuan and 31.88 billion yuan respectively, and the PE will be 11.7x/10.2x/9.5x respectively, maintaining the “buy” rating.
Risk warning: the price of products and raw materials fluctuates greatly; The production progress of the project is not up to expectations, and the capacity release is less than expected; Safety and environmental protection factors.
