\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 309 Wanhua Chemical Group Co.Ltd(600309) )
Event: Wanhua Chemical Group Co.Ltd(600309) released the annual report for 2021. The company achieved a revenue of 145538 billion yuan in 2021, a year-on-year increase of + 98.19%, and a net profit attributable to the parent company of 24.649 billion yuan, a year-on-year increase of + 145.47%, equivalent to eps7.5% 85 yuan / share, with a weighted average roe42 53%； Net assets per share were 21.82 yuan, a year-on-year increase of 40.41%; The asset liability ratio was 62.33%, with a year-on-year increase of 0.95 percentage points. In the fourth quarter, the revenue in a single quarter was 38.219 billion yuan, a year-on-year increase of + 57.92%, and the net profit attributable to the parent company was 5.107 billion yuan, a year-on-year increase of + 8.84%. The company plans to distribute a cash dividend of 2.5 yuan (including tax) per share, with a total distributed profit of 7.849 billion yuan. The company’s annual performance meets market expectations.
The business volume and price of the three sectors rose simultaneously, the annual performance increased significantly year-on-year, and the company’s performance met expectations. In the polyurethane sector, during the reporting period, due to the new production capacity of 1.1 million tons of MDI technical transformation in Yantai Park and the increase in the sales of polyether polyols, the sales volume of polyurethane business reached 3.89 million tons, a year-on-year increase of + 32.73%; Due to the sharp rise in MDI and TDI prices, the sales price was 30.32% year-on-year. In the petrochemical sector, after the million ton ethylene project was put into operation in November 2020, the sales volume of petrochemical products increased by 166.02% year-on-year, and the price of petrochemical products increased sharply due to the rise of crude oil and LNG prices, 66.47% year-on-year. The sales volume and price of ADI, waterborne resin, TPU and fine chemical products in fine chemicals and new materials increased significantly year-on-year.
R & D investment has increased significantly, R & D team has become younger, research projects focus on high-end cutting-edge new materials, and gradually realize the role change from following to leading. In 2021, 53 projects are under construction and 23 projects are under medium delivery. The project reserve is very rich. In 2021, R & D cost was 3 billion 168 million yuan, up +55.07%, and R & D investment continued to increase. The research projects mainly focused on the technological incubation of new business segments such as high-end chemical materials and solutions, emerging materials, such as carbon neutral technology, recycling and utilization of polyurethane foam, degradable materials and key monomer. High performance materials (nylon 12, special PC, Poe, optical grade PMMA, etc.), new energy energy storage and battery materials, separation and purification, etc. the company has made a forward-looking layout in emerging fields and began to gradually change its role from follower to leader.
Implement the talent strategy, promote the talent innovation project, and provide an inexhaustible driving force for the great leap forward development of the company. The company regards talents as the most important strategic resource, takes excellent culture as the guide, takes technological innovation and excellent operation as the two wheel drive, and takes six talents as the important support and guarantee to promote the future development of Wanhua. By the end of 2021, the company has 3126 R & D personnel, accounting for 16% of the total number of the company, including 42.7% with master’s or doctor’s degree, 49% with people under the age of 30 and 42% with people aged 30-40. The R & D team is highly educated and young, and the R & D reserve force is sufficient, providing an inexhaustible driving force for the company’s technological innovation and leapfrog development.
Profit forecast and investment suggestions: we expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 256.052791030.039 billion, equivalent to EPS of RMB 8.16, 8.89 and 9.57 respectively. At present, the PE valuation corresponding to the stock price is 9.9/9.0/8.4 times respectively, maintaining the “buy” investment rating.
Risk tips: the release progress of new capacity exceeds expectations, raw material procurement and exchange rate risks, environmental protection and safety production risks, the growth rate of downstream demand slows down significantly, and the project production progress is less than expected.
