Ningxia Baofeng Energy Group Co.Ltd(600989) (600989)
Event: from December 8 to 10, the central economic work conference was held in Beijing. The meeting said that “we should implement scientific assessment, exclude the new renewable energy and raw material energy from the total energy consumption control, create conditions to realize the transformation from” double control “of energy consumption to” double control “of total carbon emission and intensity as soon as possible, and accelerate the formation of an incentive and restraint mechanism for reducing pollution and carbon.”
The new renewable energy is not included in the total energy consumption control, and the company’s “green hydrogen” demonstration project is fully profitable. According to the photovoltaic industry network, new energy power does not produce carbon emissions and is not included in the total energy consumption. Previously, on September 11, 2021, the national development and Reform Commission issued the plan for improving the dual control of energy consumption intensity and total amount, which stated that “for areas that exceed the incentive renewable energy power consumption responsibility weight, the consumption exceeding the minimum renewable energy power consumption responsibility weight will not be included in the assessment of the current total energy consumption of the region’s annual and five-year plans.” The company will lay out Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen production energy storage and application demonstration project in 2019: the first batch of 30 hydrogen production equipment are planned, with an annual production capacity of 240 million standard cubic meters of “green hydrogen” and 120 million standard cubic meters of “green oxygen”, of which 10 Hydrogen Production equipment have been put into operation in April, and the remaining 20 are currently in the process of installation and commissioning, which is expected to be completed by the end of this year and commissioned at the beginning of next year. The company pioneered the direct supply of “green hydrogen” and “green oxygen” to chemical plants to replace raw coal and fuel coal for hydrogen and oxygen production. The company estimates that it can reduce coal resource consumption by about 380000 tons / year, carbon dioxide emission by about 660000 tons / year and 5% of the total carbon emission of chemical plants. In addition, according to the company’s reply to SSE e interactive on December 9, the company plans to add 30-40 electrolytic cell hydrogen production equipment into operation every year from 2022, with an annual green hydrogen output of about 300 million m3. The promotion of the company’s “green hydrogen” demonstration project is in line with the national vision of promoting the combination of coal chemical industry and new energy. In the future, with the maturity of hydrogen production technology and the further reduction of new energy costs, the economic benefits of coal based “carbon neutral” olefins are expected to continue to strengthen.
The leading coal chemical industry has entered the accelerated growth stage. In terms of coke, the 3 million T / a coking polygeneration project has been started in May 2020 and is planned to be completed and put into operation by the end of 2021. At that time, the company’s total coke production capacity will reach 7 million T / A. In terms of olefins, the 500000 T / a coal to olefin and 500000 T / a C2-C5 comprehensive utilization to olefin projects of Ningdong phase III have been steadily promoted, including 250000 T / a EVA unit. The methanol and olefin project is planned to be completed by the end of 2022, and the EVA unit will be completed and put into operation in 2023; The 500000 ton coal to olefin project of Ningdong phase IV is being publicized for environmental impact assessment. The 4 million T / a coal to olefin project in Inner Mongolia is a modern coal chemical project planned by the state and extended and supplemented by the autonomous region. It is a key demonstration project in the four modern coal chemical industry demonstration zones planned and arranged in the layout plan for innovative development of modern coal chemical industry issued by the national development and Reform Commission and the Ministry of industry and information technology during the 13th five year plan. At present, it has been approved by Inner Mongolia Eerduosi Resources Co.Ltd(600295) municipal government, It is agreed to use the olefin index in the master plan of Inner Mongolia Eerduosi Resources Co.Ltd(600295) city to build a national modern coal chemical industry demonstration zone. At present, the company is accelerating the EIA approval.
Risk tips: price fluctuation of products and raw materials, project progress not meeting expectations, safety and environmental protection factors.
Profit forecast: due to the fluctuation of raw material prices, we adjusted the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 7.015/80.08/12.132 billion respectively (formerly RMB 7.294/83.6813.121 billion), and EPS will be RMB 0.96/1.09/1.65 respectively (formerly RMB 0.99/1.14/1.79), maintaining the “buy in” rating.
