Haohua Chemical Science & Technology Corp.Ltd(600378) (600378)
event:
On December 30, the company announced that its wholly-owned subsidiary Liming chemical research and Design Institute (hereinafter referred to as “Liming Institute”) plans to invest 488 million yuan to build a 46600 T / a special new material project in Geely Huayang Industrial cluster area, Luoyang City, Henan Province. Meanwhile, liming Institute plans to invest 494 million yuan to build XX raw material industrialization capacity-building project.
Key investment points
Leading technology and adding weight to Liming Institute’s new material project: in order to promote the company’s product upgrading and promote industrial structure adjustment, liming Institute, a subsidiary of the company, plans to build 46600 T / a special new material project by taking the opportunity of returning to the city and entering the park: 1) 600 t / a palladium catalyst unit, 500 t / a diisobutyl methanol and 500 t / a tetrabutyl urea unit. 2) 20000 t / a hydrogen peroxide (27.5%) unit. 3) 25000t / a special polyurethane new material production plant. The planned construction period of the project is 36 months, with a total investment of 488 million yuan, a total return on investment of 21.08% and a financial internal rate of return of 18.02% (after income tax). The company estimates that the normal annual revenue of the project is 935 million yuan and the after tax profit is 102 million yuan. Meanwhile, liming Institute plans to invest in XX raw material industrialization capacity-building project: 6509 tons / year of XX raw materials. The planned construction period of the project is 30 months, with a total investment of 494 million yuan, a total return on investment of 14.22% and a financial internal rate of return of 13.50% (after income tax). The company estimates that the normal annual revenue of the project is 288 million yuan and the after tax profit is 72 million yuan. It is worth mentioning that the above projects adopt the process technology with independent property rights of the company. We believe that after the project is put into operation, the company’s comprehensive strength and profitability will be further improved.
Several projects under construction promote growth. In the first three quarters of 2021, the construction in progress of the company reached 946 million yuan, the fixed assets reached 2.716 billion yuan, and the construction in progress / fixed assets reached 34.82%. The company is building the 4600 T / a special fluorine-containing electronic gas construction project of Haohua gas and the 2500 t / a polyvinylidene fluoride resin project (PVDF) of Chenguang Institute. We expect to release production capacity in H1 of 2022. The project of clean energy catalytic material industrialization base of Southwest Institute is still under engineering design, and the 26000 T / a high-performance organic fluorine material project of Chenguang Institute has been started in September 2021. Meanwhile, in order to standardize and eliminate horizontal competition, Sinochem is studying the integration scheme of relevant enterprises to solve the problem of horizontal competition.
Profit forecast and investment rating: we maintain the profit forecast of the company. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 857 million, RMB 1101 million and RMB 1322 million respectively, EPS will be RMB 93 million, RMB 120 million and RMB 144 respectively, and the corresponding PE will be 52X, 40x and 34x respectively. Considering that the company is a scientific and technological enterprise with leading advantages in specific fields of high-end fluorine materials, electronic chemicals and aviation chemical materials, multiple projects under construction promote growth, the growth logic continues to be fulfilled, and the “buy” rating is maintained.
Risk tip: the product price fluctuates, the progress and profit of new projects are less than expected, and the demand drops
