\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Event: on March 10, 2022, Ningxia Baofeng Energy Group Co.Ltd(600989) released the annual report of 2021: the operating revenue reached 23.3 billion yuan, an increase of 46.29% year-on-year; The net profit attributable to the shareholders of the listed company was 7.070 billion yuan, a year-on-year increase of 52.95%; The weighted average return on net assets was 25.33%, an increase of 6.29 percentage points year-on-year. The gross profit margin of sales was 42.21%, a year-on-year decrease of 2.89 percentage points; The net profit margin of sales was 30.35%, with a year-on-year increase of 1.33 percentage points.
The revenue increased by 4.47 billion yuan year-on-year, an increase of 4.74 billion yuan over the previous year; The net profit attributable to the parent company was 1.752 billion yuan, an increase of 19.10% year-on-year and 10.54% month on month; The weighted average return on net assets was 5.88%, an increase of 0.03 percentage points year-on-year and 0.26 percentage points month on month. The gross profit margin of sales was 27.97%, a year-on-year decrease of 23.11 percentage points and a month on month decrease of 14.75 percentage points; The net sales interest rate was 24.67%, a year-on-year decrease of 7.11 percentage points and a month on month decrease of 2.99 percentage points.
Comments:
The revenue and profit increased significantly year-on-year, highlighting the company’s operating ability
The substantial growth of the company’s revenue and profit mainly benefited from the increase of product prices. In 2021, the average price of the company’s main product polyethylene was 732966 yuan / ton, a year-on-year increase of + 17.93%, and the sales volume was 737900 tons, a year-on-year increase of + 7.54%; The average price of polypropylene was 765718 yuan / ton, a year-on-year increase of + 9.86%, and the sales volume was 624200 tons, a year-on-year increase of – 1.53%; The average price of coke was 196464 yuan / ton, a year-on-year increase of + 69.70%, and the sales volume was 4.5439 million tons, a year-on-year increase of + 2.65%.
In 2021q4, the average price of polyethylene, the company’s main product, was 770927 yuan / ton, a year-on-year increase of + 14.52%, a month on month increase of + 6.51%, and the sales volume was 204700 tons, a year-on-year increase of + 9.50%, a month on month increase of + 19.09%; The average price of polypropylene was 780266 yuan / ton, a year-on-year increase of + 4.99%, a month on month increase of 2.79%, and the sales volume was 191000 tons, a year-on-year increase of + 27.17%, a month on month increase of + 14.72%; The average price of coke was 224679 yuan / ton, a year-on-year increase of + 64.80%, a month on month increase of + 0.40%, and the sales volume was 1201800 tons, a year-on-year increase of + 4.96% and a month on month increase of + 13.69%.
In the reporting period of 2021, the company’s operating cost was 13.466 billion yuan, a year-on-year increase of 53.99%, mainly due to the rise in the price of raw materials during the reporting period. In 2021, the purchase unit price of gasification raw coal of the company was 661.57 yuan / ton, with a year-on-year increase of 91.24%; The purchase unit price of coking clean coal was 118387 yuan / ton, a year-on-year increase of 96.72%. The total cost of affecting olefin products increased by 252300 yuan year-on-year, the total cost of coking products increased by 176200 yuan year-on-year, and the total cost of fine chemical products increased by 42600 yuan year-on-year.
In 2021, the net cash inflow from operating activities in the reporting period was RMB 6.488 billion, a year-on-year increase of RMB 1.304 billion, an increase of 25.16%, mainly due to the large year-on-year increase in the company’s product price and the increase in cash received from selling goods. In 2021, the company received 19.434 billion yuan in cash from selling goods and providing labor services, a year-on-year increase of + 36.12%.
In 2021, the company’s sales expense ratio was 1.90%, a year-on-year decrease of 1.47 percentage points; The management expense ratio was 1.90%, a year-on-year decrease of 1.35 percentage points; The financial expense ratio of the company was 1.39%, a year-on-year decrease of 0.49 percentage points; The R & D expense rate was 0.23%, a year-on-year decrease of 0.40%.
The construction of the project has been carried out in an orderly manner and is expected to continue to grow in the future
In 2021, the company will pay close attention to the construction of key projects to ensure that the projects are put into operation step by step. The national Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen production energy storage and application demonstration project was completed by the end of the first quarter of 2022, and Cecep Solar Energy Co.Ltd(000591) power generation is under construction. The 500000 T / a coal to olefin and 500000 T / a C2-C5 comprehensive utilization to olefin projects in 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. Ningdong phase IV coal to olefin project has been publicized before EIA. The project will build 300000 t / a polypropylene and 250000 T / a EVA, and by-products such as sulfur, mixed C4, C5 +, propane and so on. Mixed C4, C5 +, propane and other by-products are sent to C2-C5 comprehensive utilization olefin project as raw materials. The first coke oven of the 3 million T / a coking polygeneration project is expected to be installed in cold state by the end of August 2021. The completion of the supporting closeout project is being accelerated and put into operation as soon as possible on the premise of ensuring safety and environmental protection. The 4 million T / a coal to olefin project in Inner Mongolia has many procedures before putting into operation. At present, most of the approval procedures have been implemented, and the company is continuing to improve other approval procedures of the project. The opinions on completely, accurately and comprehensively implementing the new development concept and doing a good job in carbon peak and carbon neutralization issued by the CPC Central Committee and the State Council pointed out that “if it is not included in the industrial planning of relevant fields of the state, no new coal to olefin projects shall be built”. The Inner Mongolia project of the company belongs to the project 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, The company will continue to actively promote various work processes in the later stage.
The profitability of coal chemical products is expected to improve under high oil prices
With the rising international crude oil prices, on March 9, the settlement price of WTI crude oil futures was US $111.14/barrel, the highest level in recent years. Under the high oil price, the cost of petrochemical products increases and the profitability decreases. Coal prices began to fall under the control of China’s policies. Under the high oil price, the profitability of coal chemical products is expected to improve, the cost advantage of coal chemical enterprises is further highlighted, and the company’s profit is expected to continue to rise.
The process technology has been continuously optimized and won the first place in coal to olefin production enterprise, the benchmark enterprise of “leader” in energy efficiency, with prominent advantages in energy conservation and carbon reduction
On August 17, 2021, the official website of China Petroleum & Chemical Corporation(600028) Federation publicized the list and indicators of energy efficiency “leaders” and water efficiency “leaders” of key products in the petroleum and chemical industry in 2020, Ningxia Baofeng Energy Group Co.Ltd(600989) won the first place in the evaluation of coal to olefin production enterprises. The company’s comprehensive energy consumption per ton of ethylene and propylene is 2396kg standard coal, leading the second 247kg standard coal; Ethylene takes the lead in 26 kWh and 45kwh of propylene. The company has strengthened scientific and technological research, continuously optimized production processes and technical parameters, reduced unit consumption of products through multiple channels and improved resource utilization efficiency. The second olefin plant of the company continuously optimized the operating parameters, and the unit consumption of methanol (refined methanol) was 2.852 tons / ton, a decrease of 0.033 tons / ton over the same period of last year, creating the best level in the industry; The tail gas recovery transformation of demethanizer was completed, and the propane yield was increased from 0.29% to 0.53%. The unit consumption of raw coal for methanol production in methanol plant 1 (5400 kcal coal) is 1.41 tons / ton, and the unit consumption of raw coal in methanol plant 2 (5400 kcal coal) is 1.37 tons / ton, which is 0.07 tons / ton lower than that of the previous year and continues to maintain the low level of the industry. With the continuous optimization of the company’s process technology, the company’s cost advantage will be more obvious.
Accelerate the layout of green hydrogen and continue to promote the transformation of the company’s new energy
Ningxia Baofeng Energy Group Co.Ltd(600989) actively respond to the call of the national clean energy development strategy, implement the national major strategic deployment of “carbon peaking and carbon neutralization”, promote the substitution of fossil energy with new energy based on the concept of green and sustainable development, relying on scientific and technological innovation and source treatment, and build a national ” Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen production, energy storage and application demonstration project”.
The project adopts a high-efficiency alkaline electrolytic cell hydrogen production equipment with a single capacity of 1000 standard m3 / h, and is equipped with corresponding hydrogen compression and storage equipment, which can produce 240 million standard m3 “green hydrogen” and 120 million standard m3 “green oxygen” per year. The project adopts internationally advanced technology and equipment, and pioneers the direct supply of “green hydrogen” and “green oxygen” to chemical plants to replace raw coal and fuel coal for hydrogen and oxygen production. It can increase and reduce the annual consumption of coal resources by about 380000 tons, increase and reduce the annual carbon dioxide emission by about 660000 tons, and increase and reduce 5% of the total carbon emission of chemical plants. The comprehensive benefits are remarkable. The company has made sufficient preparations for the transformation from fossil energy to new energy and the realization of green and low-carbon transformation and upgrading. It plans to replace raw coal with “green hydrogen” produced by new energy in 20 years, so that the company is not restricted by coal resources and can maintain the stability of cost; The realization of near zero carbon dioxide emission and unlimited environmental capacity provides a great development prospect for the company Ningxia Baofeng Energy Group Co.Ltd(600989) is committed to being the leader in the development of “carbon neutrality”. It will continue to increase scientific and technological innovation, accelerate the substitution of new energy, strive to complete the enterprise’s carbon emission reduction by 50% in 10 years, take the lead in realizing the enterprise’s “carbon neutrality” in 20 years, and actively contribute to the realization of the national “double carbon” goal and green and high-quality development.
Actively take measures to deal with the abnormal situation of coal supply
Coal is the raw material of the company’s main products polyethylene, polypropylene and coke. The stable supply of coal is the basis for the stable operation of the company’s production and operation. From September to October 2021, due to the superposition of several special factors, the price of raw coal has more than doubled, and the supply of coal source is gradually tight; In the two months from November to December, the price fell by more than half from the high point and returned to the level before the sharp rise. The drastic change of coal price has brought great pressure to the company’s coal supply and cost management. During the period of tight coal supply, on the one hand, the company actively strengthened the communication with the surrounding coal production suppliers in the three provinces of Shanxi, Shaanxi and Inner Mongolia, and added 19 suppliers to ensure the stable supply of raw coal for polyethylene and polypropylene production and all kinds of clean coal for coking. On the other hand, the company opened up new supply channels and negotiated to purchase high calorific value coal from Xinjiang as a supplement to power coal, A new channel of “Xinjiang coal into Nanjing” has been established. The company pays close attention to the changes of coal market and national policies, accurately predicts the price inflection point, and timely adjusts the raw coal inventory during the high price period, which not only ensures the safety of raw coal in winter, but also avoids the loss of large inventory falling price. Continue to expand the coal transportation volume of the vehicle free transportation platform with obvious price advantages. The annual transportation volume of raw coal platform was 9.75 million tons, accounting for 84.3% of the total transportation volume of raw coal, and the freight per ton was saved by 2.86 yuan.
Strengthen technological innovation and management, and continuously reduce the unit consumption of product energy and materials
The second olefin plant of the company continuously optimized the operating parameters, and the unit consumption of methanol (refined methanol) was 2.852 tons / ton, a decrease of 0.033 tons / ton over the same period of last year, creating the best level in the industry; The tail gas recovery transformation of demethanizer was completed, and the propane yield was increased from 0.29% to 0.53%. The unit consumption of raw coal for methanol production in methanol plant 1 (5400 kcal coal) is 1.41 tons / ton, and the unit consumption of raw coal in methanol plant 2 (5400 kcal coal) is 1.37 tons / ton, which is 0.07 tons / ton lower than that of the previous year and continues to maintain the low level of the industry. In the list of “2020 energy efficiency benchmark enterprises of key energy consumption products in petroleum and chemical industry” released by Petrochina Company Limited(601857) and Chemical Industry Federation, the company ranks first in coal to olefin industry and has the lowest energy consumption level in the industry.
Optimize equipment management and production operation management to continuously improve production efficiency
Strengthen the maintenance, repair, technical transformation and renewal of equipment, optimize production scheduling and operation management, maintain the “safe, stable, full and excellent” operation of production, and the output of main products (including intermediate products) hit the best level in history. While the coke capacity, polyethylene and polypropylene capacity remained unchanged, the coke output was 4.5459 million tons, an increase of 102400 tons or 2.31% year-on-year; The output of polyethylene and polypropylene was 1.3656 million tons, with a year-on-year increase of 30100 tons, an increase of 2.26%. The direct export of propylene was 101800 tons, with a year-on-year increase of 60200 tons, an increase of 145.13%, both reaching the best level in the history of the company. At the same time, the output of methanol also reached a record high. The output of MTO grade methanol was 4.574 million tons, with a year-on-year increase of 1.207 million tons, an increase of 35.85%, which reduced the outsourcing volume of methanol and saved a lot of raw material procurement costs.
Increase investment in technology, steadily develop high-end products and form a cascade structure of products
During the reporting period, R & D investment increased by 32.48% over the same period of last year. Polypropylene high melt index, thin-wall injection molding and high-end polyethylene products were successfully developed, such as medium melt copolymerization K8009, high melt copolymerization k7726h, open linear 7042h, thin-wall injection molding m600e and other new brand products. Three brands of metallocene polyethylene m3506rti, m6040 and m2310 were successfully trial produced. The construction progress of EVA project is half full, The cascade structure of general material products, special material products, metallocene products and EVA products has been preliminarily formed. According to the special needs of customers, 7 new varieties of coke have been developed, and a product library of 15 products and more than 20 proportions has been preliminarily established. Different coal blending structures can be selected according to the price differences of coking coal and weak sticky coal, so as to enhance the competitiveness in different market environments. During the reporting period, 34 new patents were applied for, including 4 invention patents; 26 new authorized patents, including 1 invention patent; Newly applied for 3 computer software copyrights and obtained the registration certificate.
Reasonably promote the project of electrolytic water to produce “green hydrogen” and move towards the road of green development
On February 9, 2021, the first electrolytic cell began power transmission commissioning, and the first batch of 30 sets of 1000 standard m3 / h electrolytic water hydrogen production equipment were built, with a green hydrogen production capacity of 240 million standard m3 / year (21400 tons). The hydrogen produced by the project was sent to the chemical plant. Since 2022, it is planned to increase the green hydrogen production capacity by 300 million standard cubic meters per year, increase and reduce 5% of the total carbon emission of chemical plants per year, strive to complete the enterprise’s carbon emission reduction by 50% in 10 years, and take the lead in realizing the enterprise’s carbon neutralization in 20 years.
Actively promote the construction of major projects
Accelerate the completion of the 3 million T / a coal coking polygeneration project and put it into operation as soon as possible on the premise of ensuring safety and environmental protection; Comprehensively promote the construction of 1 million T / a coal to olefin and C2-C5 comprehensive utilization to olefin projects in Ningdong phase III, and strive to put the coal to methanol project into operation first by the end of the year; Obtained the EIA approval of the 4 million T / a (phase I 2.6 million T / a) coal to olefin project in Inner Mongolia and officially started construction; Continue to do a good job in the installation and engineering construction of the second batch of equipment for electrolytic water hydrogen production project; Strive to complete the approval procedures of Ningdong phase IV coal to olefin project and start construction; Strive to build a 200000 t / a styrene project by the end of the year to achieve a new profit growth point.
Guarantee the supply and security of construction funds
At present, the uncertainty of the external economic environment has increased, and the company’s projects are in the centralized construction period with large investment. We should comprehensively plan our own funds and external financing, strictly limit the borrowing scale while ensuring the needs of project construction funds, maintain the company’s current low asset liability ratio and maintain strong anti risk ability.
Strengthen the training and construction of talent team
In recent years, the company has many construction projects and rapid development. The cultivation and construction of talent team is very important. Both inside and outside, on the one hand, fully tap the existing talent potential of the company and contribute management and technical talents to new projects; On the other hand, we should actively introduce multi-level talents, provide a platform for more talents to give full play to their expertise and realize value, and form a team with achievements, responsibilities, feelings and talents under the cohesion of Baofeng culture
