\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Performance
The annual report of the parent company was issued with a year-on-year increase of RMB 23.3 billion, with a year-on-year increase of RMB 23.6 billion and a net profit attributable to the parent company of RMB 23.3 billion.
Analysis
In the context of the substantial increase in the overall raw material price, it once again reflects the good cost control ability. In 2021, China’s raw materials experienced a substantial price rise, but the price increase of olefins was relatively small. In the process of narrowing the price difference of the whole industry, the company focused on its own cost optimization and cost control, and maintained a relatively good profitability under the relative pressure of the industry. On the one hand, in the production process, The company further optimized its production technology and achieved further decline in the unit consumption of methanol raw coal and olefin methanol, driving the decline of raw material consumption. At the same time, the company’s production line operated efficiently, and the overall capacity utilization and sales volume were further improved, which resisted the pressure of industry price difference to a great extent.
In the fourth quarter, the company’s product sales increased month on month, and the high-level operation of coke supported the overall profitability. In the fourth quarter, the company further improved the sales of olefins and coke. The sales of olefins increased by about 17% and 17% on a month on month basis, and the sales of coke increased by about 5% and 14% on a month on month basis. At the same time, the sales price of coke remained relatively high in the fourth quarter. Most of the raw materials of coking coal of the company can realize themselves, driving the profitability of coke business, Due to the narrowing of the overall price difference of the olefin industry, the company’s relative profit has dropped to a certain extent, but it is still better than the industry level. Meanwhile, in the fourth quarter, the company focused on cost control, and the overall profit remained at a good level.
The layout of green hydrogen drives the sustainable development of the company, and the continuous incremental projects support the growth of the company. With its forward-looking layout and geographical advantages, the company carries out small-scale substitution of fossil energy through the green hydrogen project, gradually reduces the replacement cost and expands the replacement scale through the non expanding project scale and continuously optimized technical capacity every year, so as to make more space for the sustainable development of the company in the future. In the future, the company’s 3 million ton coke project will gradually contribute to its performance. Ningdong phase III, phase IV and Inner Mongolia projects are expected to be implemented one after another, driving the company’s continuous growth.
Investment advice
With the increase of crude oil price, it is expected that the cost will drive the price rise of olefins and gradually increase the price difference of the company’s products. At the same time, the company will continue to put into operation projects in the future. It is predicted that the company will realize the net profit attributable to the parent company of 8.166, 10.105 and 11.255 billion yuan from 2022 to 2024, EPS of 1.11, 1.38 and 1.54 yuan, and the corresponding PE of 15.6, 12.4 and 11.1 times respectively, maintaining the “buy” rating.
Risk tips
The risk of sharp fluctuations in crude oil and coal prices, the impact of the dual carbon policy on the wind direction of new project approval, and the risk that the project commencement does not meet the expectations.
