Satellite Chemistry (002648)
Event: on December 28, 2021, the company signed the investment project cooperation agreement with the Management Committee of the National East Central West Regional Cooperation Demonstration Zone ( Jiangsu Lianyungang Port Co.Ltd(601008) Xuwei New Area). The company plans to invest in the new green chemical new material industrial park project in Jiangsu Lianyungang Port Co.Ltd(601008) Xuwei new area.
Key investment points
Accelerate the transformation into a science and technology enterprise of low-carbon chemical new materials: according to the investment project cooperation agreement, the total investment of the project includes tax of about 15 billion yuan, including tax of about 13 billion yuan in fixed asset investment. The construction contents mainly include an annual output of 200000 tons of ethanolamine (EOA), 800000 tons of polystyrene (PS) and 100000 tons α- Olefins and supporting Poe, 750000 T / a carbonate series production units and related supporting projects are implemented step by step in three phases. The project is planned to start construction before March 30, 2022, and the phase III project will be completed and put into operation in December 2027. Phase I project includes two sets of 150000 T / a carbonate and electrolyte additive units, two sets of 100000 t / a ethanolamine units, two sets of 200000 t / a polystyrene units and supporting public and auxiliary projects; Phase II project includes an annual output of 100000 tons α- Olefin and Poe units, annual output of 150000 T / a carbonate series units; Phase III project includes 400000 tons of polystyrene (PS) unit and 300000 tons of carbonate series unit, etc. We believe that one of the important features and advantages of the project is to make full use of the products of the company’s subsidiary Jiangsu Lianyungang Port Co.Ltd(601008) Petrochemical Co., Ltd. to continue deep processing, improve added value and realize integrated development. For example, polystyrene is made of styrene, the product of Jiangsu Lianyungang Port Co.Ltd(601008) Petrochemical phase II project, and ethanolamine and carbonate are made of existing ethylene oxide.
Planning multiple projects to promote growth: looking forward to 2022, with the price correction of some chemical products, we pay special attention to the ability of chemical enterprises to continuously expand production and promote growth by supplementing price with quantity. The company is building and planning a number of projects, and implements the business partner shareholding plan to stimulate the vitality of employees. (1) The phase II 1.25 million ton ethylene industry chain project is planned to be completed and put into operation in 2022. (2) 300000 t / a polypropylene new materials (R & D and production of modified polypropylene) and 250000 T / a hydrogen peroxide are planned to be completed by the end of 2021. (3) It is planned to invest in the construction of 800000 tons of PDH, 800000 tons of butyl octanol, 120000 tons of neopentyl glycol and supporting devices in the management committee area of Dushan Port Area, which is planned to be completed by the end of 2023. (4) Cooperate with SK to build and operate 40000 t / a ethylene acrylic acid copolymer project. (5) The project of green chemical new material industrial park announced this time. (6) The company has rich hydrogen resources. As of December 2021, the by-product hydrogen of the company’s PDH unit is about 72000 tons / year, and the by-product hydrogen of Jiangsu Lianyungang Port Co.Ltd(601008) Petrochemical is about 70000 tons / year. It is expected that the company’s hydrogen output will reach nearly 300000 tons / year by 2023.
Profit forecast and investment rating: maintaining the previous profit forecast, we expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 6.547 billion, RMB 8.528 billion and RMB 10.130 billion respectively, corresponding to EPS of RMB 3.81, RMB 4.96 and RMB 5.89, and PE of 11x, 8x and 7x. Considering that the company takes light chemical raw materials as the core, the ethylene and propylene industry chains develop together, continuously promote high-quality development during the 14th Five Year Plan period, build a low-carbon chemical new material technology company, with an upward performance center and maintain the “buy” rating.
Risk tips: the price of raw materials and products fluctuates greatly, the project is put into operation and the profit is less than expected, the macroeconomic recovery is less than expected, safety and environmental protection.
