\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Event: the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 23.3 billion yuan, a year-on-year increase of 46.29%, a net profit attributable to the parent company of 7.07 billion yuan, a year-on-year increase of 52.95%, a net profit attributable to the parent company of 7.336 billion yuan, a year-on-year increase of 51.33%, and a basic earnings per share of 0.97 yuan. The company also announced the dividend plan, which plans to pay a cash dividend of 0.3210 yuan (including tax) per share for shares with unlimited sales conditions and 0.2648 yuan per share for shares with limited sales conditions.
The boom of the industry drives the prices of main products up, controls the principal, guarantees supply and increases revenue. The company is a leading enterprise in the field of new coal chemical industry in China. Its main business includes coal to olefin and coking business, and its main products include polyethylene, polypropylene and coke. In 2021, with the overseas economic recovery driving the growth of demand, the prices of coal, crude oil and other energy rose sharply, which promoted the price rise of olefins, coke and other products of the company and led to the growth of the company’s main revenue. The sales volume of polyethylene, polypropylene and coke of 2021 company was 738000 tons, 624000 tons and 4544000 tons respectively, with year-on-year changes of 7.55%, – 1.53% and 2.65%. The sales prices were 732966 yuan / ton, 765718 yuan / ton and 196464 yuan / ton respectively, with year-on-year increases of 17.93%, 9.86% and 69.70%. Driven by the rise in product prices, the company achieved an annual operating revenue of 23.3 billion yuan, a year-on-year increase of 46.29%, including 11.52 billion yuan for olefin products, a year-on-year increase of 24.93%, 9.336 billion yuan for coking products, a year-on-year increase of 79.43%, and 2.367 billion yuan for fine chemical products, a year-on-year increase of 62.90%.
Under the tight supply of coal and other raw materials throughout the year, on the one hand, the company controls the cost by reducing the unit consumption of energy and raw materials and improving the operation efficiency. On the other hand, it contacts with new and old suppliers and introduces Xinjiang high calorific value coal as a supplement to ensure the stable supply of raw materials. Through various cost control and supply guarantee measures, the company’s annual gross profit margin declined slightly and remained at a high level on the whole. In 2021, the company’s comprehensive gross profit margin was 42.21%, a year-on-year decrease of 2.89 percentage points, of which the gross profit margin of olefins was 32.31%, a year-on-year decrease of 10.46 percentage points, the gross profit margin of coke was 55.23%, a year-on-year increase of 1.68 percentage points, and the gross profit margin of fine chemical products was 38.34%, a year-on-year increase of 9.48 percentage points. In addition, the company’s expenses were well controlled, and the total expense rate during the whole year was 4.5%, a year-on-year decrease of 4.63 percentage points. Among them, the sales expense rate was 0.26%, a year-on-year decrease of 3.12 percentage points. Driven by the decline of expense rate, the company’s annual net interest rate was 30.35%, an increase of 1.33 percentage points year-on-year, which promoted the growth of annual performance.
Crude oil has entered the high oil price range, and the leader of coal chemical industry is expected to benefit. Since the end of 2021, with the rising demand and supply constraints, the global crude oil price has risen rapidly and gradually entered the high oil price range. The recent conflict between Russia and Ukraine has further exacerbated the tense situation of global crude oil supply and promoted the further rise of oil price. In the case of high crude oil prices, coal to olefins as an alternative route has strong profit elasticity. Although the coal price also experienced a sharp rise in 2021, under the regulation of the national supply expansion policy, the coal price has fallen to a relatively low level. On February 24, the national development and Reform Commission issued the notice on further improving the coal market price formation mechanism, which made it clear that the medium and long-term tax price of underground coal in Qinhuangdao port is between 570 yuan / ton and 770 yuan / ton, which is expected to reduce the cost of raw coal mined by the company. At present, the prices of oil, ethane and propane remain relatively high, bringing cost advantages to the coal to olefin process.
Various projects are advancing steadily to ensure future performance growth. In 2021, the company made steady progress in various projects, providing a solid foundation for future performance growth. The main project of the company’s 3 million T / a coking polygeneration project has been completed and is expected to be put into operation within the year. At that time, the total coke production capacity of the company will increase from 4 million tons / year to 7 million tons / year, so as to ensure the growth of performance this year. The Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen production energy storage and application demonstration project of the company will be completed by the end of the first quarter, and the Cecep Solar Energy Co.Ltd(000591) power generation project is under construction. After the completion of the project, the annual coal resource consumption can be increased and reduced by about 380000 tons, the annual carbon dioxide emission can be increased and reduced by about 660000 tons, and the annual carbon emission of chemical plants can be increased and reduced by 5% of the total carbon emission. The comprehensive benefits are remarkable. In addition, 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. Ningdong phase IV has been publicized before EIA. In addition, most approval procedures have been implemented for the 4 million T / a coal to olefin project in Inner Mongolia, and the company is continuing to improve other approval procedures for the project. Under the guarantee of multiple projects, the company has a solid foundation for future performance growth.
Profit forecast and investment rating: it is estimated that the company’s EPS in 2022 and 2023 will be 1.09 yuan and 1.53 yuan. Calculated by the closing price of 17.17 yuan on March 10, PE will be 15.70 times and 11.21 times respectively, giving the company an investment rating of “overweight”. Risk warning: the price of raw materials has risen sharply and the progress of the project is lower than expected
