\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
The profitability is stable, and the growth space of carbon neutral leader is large. Maintain “buy” rating
The company released an annual report, and achieved a revenue of 23.3 billion yuan in 2021, a year-on-year increase of + 46.3%; The net profit attributable to the parent company was 7.07 billion yuan, a year-on-year increase of + 53.0%. According to the promotion of new production capacity and the price changes of products and raw coal, we maintain the profit forecast and add the forecast for 2024. It is estimated that the net profit attributable to the parent company will be RMB 8.05/109.0/18.23 billion from 2022 to 2024, with a year-on-year increase of 13.8% / 35.4% / 67.3%; EPS is 1.10/1.49/2.49 yuan, corresponding to the current stock price, and PE is 15.7/11.6/6.9 times. The company’s products benefited from the high oil price, while the cost elasticity of raw coal was limited, and there was large room for growth in the future, so it maintained the “buy” rating.
Olefin profitability declined year-on-year, while coke profitability increased year-on-year
The sharp rise in the price of raw coal caused a slight decline in the profitability of olefins. In 2021, the company’s sales prices of polyethylene and polypropylene were 7329.7 yuan / ton and 7657.2 yuan / ton respectively, with a year-on-year increase of 17.9% and 9.9%. The purchase price of gasification raw coal was 661.6 yuan / ton, with a year-on-year increase of 91.2%, and the price difference decreased by 6.9% (absolute value decreased by 362 yuan / ton). Coke continues to contribute to profits steadily. In 2021, the company’s coke sales price was 1964.6 yuan / ton, and the purchase price of coking clean coal was 1183.9 yuan / ton, with a year-on-year increase of 69.7% and 96.7% respectively, and the price difference increased by 9.2% year-on-year (the absolute value increased by about 33 yuan / ton).
New production capacity continues to be promoted, carbon neutral layout opens up room for growth
Coking polygeneration project: the 3 million T / a coal coking polygeneration project has entered the final stage of supporting projects. It is expected to be completed and put into operation in the first half of 2022, and strive to complete the 200000 t / a styrene supporting project by the end of 2022. Phase III olefins: 500000 T / a coal to olefins and 500000 T / a C2-C5 comprehensive utilization to olefins are expected to be put into operation in the first half of 2023. Phase IV olefin: complete the approval procedures of Ningdong phase IV 500000 T / a coal to olefin project and start construction in 2022. Inner Mongolia olefin project: 4 million T / a coal to olefin project (phase I 2.6 million T / a) can be started after the EIA approval. Green hydrogen project: Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen production, energy storage and application demonstration project will be completed and put into operation in the first quarter of 2022, with an annual output of 240 million standard cubic meters of green hydrogen and 120 million standard cubic meters of green oxygen. In the future, green hydrogen will be produced at an annual growth rate of 300 million standard cubic meters, and strive to take the lead in realizing enterprise carbon neutralization in 20 years.
The policy is favorable for the development of coal chemical industry, and the main business fundamentals continue to improve
Policies support the development of modern coal chemical industry. The government work report and the 14th five year plan of the industry clearly support the development of modern coal chemical industry such as coal to olefins. “Energy consumption of raw materials is not included in the total energy consumption control”, which reduces the energy consumption index of local governments occupied by coal to olefins by about 70%. Policies support wind power generation and hydrogen production from electrolytic water to replace coal to produce hydrogen. The company’s energy transformation route of green hydrogen coupling modern coal chemical industry has been supported by Ningdong base. The company’s new olefin production capacity and green hydrogen project are expected to continue to benefit. The profitability of the main business is expected to improve. Oil prices are rising, but China’s spot coal prices are subject to policy constraints to a certain extent. Compared with large refining and chemical enterprises, coal to olefin has prominent profit advantages. With the end of the two sessions and the Paralympic Games and the superposition of stable growth expectations, coke prices rebound and coke profits are expected to thicken.
Risk tips: the risk of falling product prices, the risk of rising raw material prices, and the risk of new projects falling short of expectations
