Jiangsu Eastern Shenghong Co.Ltd(000301) (000301)
Jiangsu Eastern Shenghong Co.Ltd(000301) acquisition of Sri Lanka passed unconditionally
On December 22, 2021, Jiangsu Eastern Shenghong Co.Ltd(000301) acquisition of Jiangsu silbang Petrochemical Co., Ltd. (silbang) was unconditionally approved by the M & A Review Committee of listed companies of CSRC.
1. After the acquisition meeting of Sri Lanka, it is expected that 2022q1 will be consolidated
Sri Lanka's main products are downstream derivatives of ethylene and propylene, including 300000 tons of EVA, 420000 tons of EO and downstream derivatives, 520000 tons of acrylonitrile and 170000 tons of MMA. By December 2021, the company's propane industry chain project is under construction. After it is completed and put into operation, it will increase the production capacity of 700000 T / a propane dehydrogenation, 260000 T / a acrylonitrile and 85000 T / a MMA.
The typical representative of high-end brands of sierbang EVA products is photovoltaic material products. From 2018 to the first half of 2021, the proportion of EVA photovoltaic material sales increased significantly from 7.57% to 67.18%. In the first half of 2021, the output will be 175600 tons.
2. Shenghong refining and chemical project has the right to use or import crude oil, which will ensure the smooth start-up of the project
Shenghong Refining & Chemical Co., Ltd. is expected to be completed within this year. According to the company's announcement in September 2021, the national development and Reform Commission agrees in principle that the project owner will use 16 million tons of imported crude oil per year, including 2 million tons of imported crude oil in 2021, 15.89 million tons of imported crude oil in 2022 and 16 million tons of imported crude oil from 2023.
3. Shenghong group creates "three million ton" projects
Shenghong group has started the construction of three "million ton" projects to build a world-class industrial cluster of new energy and new materials. They are the megaton EVA photovoltaic new energy material project, megaton acrylonitrile new material project and megaton green degradable material project.
Profit forecast and Valuation: as the injection has not been completed, the performance forecast for 2022 / 2023 is temporarily maintained at 7.9/9.5 billion. According to our estimation, if Sri Lanka completes the injection and refining and chemical industry is expected to start contributing performance next year, the net profit in 2022 is expected to reach 12 billion (polyester thermal power 2 billion + Sri Lanka 4 billion + refining and chemical 6 billion). Maintain the "buy" rating.
Risk warning: the risk that the production of refining and chemical projects is slower than expected; Risk of decline in refining and chemical profits; Risk of sharp decline in profits of polyester products; Risks of raw materials and price fluctuations.
