\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Event: Ningxia Baofeng Energy Group Co.Ltd(600989) released the annual report of 2021. During the reporting period, the company achieved a total operating revenue of 23.3 billion yuan, a year-on-year increase of + 46.29%; The net profit attributable to the parent company was 7.070 billion yuan, a year-on-year increase of + 52.95%. In the fourth quarter, the company achieved a total operating revenue of 7.104 billion yuan in a single quarter, a year-on-year increase of + 53.48% and a month on month increase of + 24.00%; The gross profit in a single quarter was 1.987 billion yuan, a year-on-year increase of – 15.98% and a month on month increase of – 18.83%; The net profit attributable to the parent company was 1.752 billion yuan, a year-on-year increase of + 19.11% and a month on month increase of + 10.58%. At the same time, the company announced the profit distribution plan for 2021. The company plans to implement differentiated dividends to all shareholders based on 7.314 billion shares (excluding repurchased shares), with cash dividends of 3.21 yuan per share for current shareholders and 0.26 yuan per share for restricted shares, totaling 2.053 billion yuan (excluding the amount of repurchased shares), Accounting for 33.20% of the company’s net profit attributable to the parent company in 2021.
Comments: the volume and price of the company’s main products rose in 2021, pushing up the growth rate of revenue. In 2021, the company’s overall product sales increased, and the increment of olefin segment was mainly contributed by polyethylene; The sales volume of coking division increased against the trend against the background of the overall volume reduction of the industry, and the market share further increased; The division of fine chemicals is relatively stable. In terms of price, affected by the rising cost of raw materials, the growth rate is significant. In terms of profitability, polyolefin’s price transmission is not smooth due to the great impact of industry supply increment, and the gross profit margin has decreased; However, the coke sector benefited from its own coal advantages, offset the impact of high raw material prices, and the gross profit margin rose year-on-year. In the future, with the further improvement of the company’s coal self-sufficiency rate, it is expected to continue to enhance the company’s low-cost competitive advantage.
In 2021, the company continued to increase production and operation improvement, achieve cost reduction and efficiency increase, and lead the industry: in the list of “2020 energy efficiency leader benchmarking enterprises of key energy consumption products in petroleum and chemical industry” released by Petrochina Company Limited(601857) and Chemical Industry Federation, the company ranked first in coal to olefin industry, with the lowest energy consumption level in the industry, The comprehensive energy consumption per ton of olefins is lower than the second 247kg standard coal in the industry. In terms of raw material consumption, the unit consumption of raw coal of the second olefin plant of the company is 1.37 tons / ton (the industry average is 1.5 tons / ton), and the unit consumption of methanol (refined methanol) is 2.852 tons / ton (the industry average is 3 tons / ton), which are significantly better than the industry average.
Firmly optimistic about the company’s sustainable growth and sustainable development. According to the company’s announcement information, the company currently has 3 million T / a coking polygeneration project (the remaining part of the final project), 500000 T / a coal to olefin project, 500000 T / a C2-C5 comprehensive utilization to olefin project (including 250000 T / a EVA unit), and 4 million T / a coal to olefin project in Inner Mongolia (phase I 2.6 million T / a). Meanwhile, the company’s phase IV coal to olefin project (300000 t / a polypropylene) has been publicized for environmental impact assessment. During the “14th five year plan” period, the company’s projects are expected to be put into operation and achieve efficiency, and is expected to achieve 6.7 million tons / year coal to olefin capacity and 7 million tons / year coke capacity. At the same time, the supporting 800mwp Cecep Solar Energy Co.Ltd(000591) power generation project of 30000 standard m3 / h electrolytic water hydrogen production of the company continues to be promoted. It is planned to increase the green hydrogen production capacity by 300 million standard m3 every year and reduce the total carbon emission of chemical plants by 5%. It is expected to take the lead in realizing enterprise carbon neutralization in 20 years.
Investment suggestion: maintain the Buy-A investment rating. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 8.063 billion, RMB 10.545 billion and RMB 14.267 billion respectively.
Risk tips: systemic liquidity risk, repeated epidemic risk, project under construction less than expected risk, safety and environment risk, product price fluctuation risk, etc
