\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 309 Wanhua Chemical Group Co.Ltd(600309) )
Core view
The volume and price of main products increased simultaneously, and the performance increased significantly in 2021. On March 14, Wanhua Chemical Group Co.Ltd(600309) disclosed the annual report of 2021: benefiting from the simultaneous rise in the volume and price of the company’s main products in 2021, the company achieved a total operating revenue of 145538 billion yuan in 2021, a year-on-year increase of 98.19%; The net profit attributable to the parent company was 24.649 billion yuan, a year-on-year increase of 145.47%. The non net profit attributable to the parent company was 24.356 billion yuan, a year-on-year increase of 155.2%. The basic earnings per share is 7.85 yuan / share. That is, in the single quarter of 2021q4, the company realized a net profit attributable to the parent company of RMB 5.107 billion, which was – 15.04% and + 8.84% month on month and year-on-year respectively. In 2021, the company achieved high-quality development and its performance met our expectations. It is worth mentioning that the company’s management theme of “reducing cost and improving efficiency” has achieved remarkable results, and the rate of Wanhua Chemical Group Co.Ltd(600309) various expenses has decreased significantly in recent two years (the company’s sales expenses in 2020 have been adjusted retroactively).
Benefiting from the substantial growth of exports, the MDI boom has been repaired in 2021. In 2021, due to the impact of cold wave and hurricane weather in North America, many sets of MDI devices encountered force majeure, resulting in a shortage of global supply. In 2021, China’s aggregate MDI import and export volume were 297500 tons and 1013800 tons respectively, a year-on-year decrease of 19.3% and an increase of 65.3%; The import volume and export volume of pure MDI were 71000 tons and 121000 tons respectively, with a year-on-year decrease of 28% and an increase of 22.7% respectively. Overall, the average price of MDI in the whole year is higher than that in the same period in 2020. In terms of domestic demand, the national output of household refrigerators in 2021 was 89.921 million, a year-on-year decrease of 0.4%. Affected by the price of traditional off-season and related products, the overall demand of exterior wall, pipeline and other industries is flat. In addition to the demand for formaldehyde free board adhesive, there are still bright spots, and the demand for polymerized MDI is flat; In the downstream of pure MDI, the market of TPU, sole stock solution and polyurethane stock solution maintained steady growth, and the gradual production of spandex gave birth to the increase of pure MDI demand in China. From a long-term perspective, we are optimistic that the supply and demand pattern of MDI in the medium and long term is still good, and the promotion of aldehyde free furniture will give birth to the growth point of MDI demand.
Petrochemical and fine chemical businesses have expanded steadily and actively entered the field of new materials and new energy. Benefiting from the full operation of the megaton ethylene project and the recovery of the average price of petrochemical products, the production and sales volume of the company’s petrochemical business increased significantly in 2021; The business of fine chemicals and new materials has injected development vitality into the company. At present, several key projects of new materials have made progress. In addition, the company’s layout of nuclear power, photovoltaic, lithium and other projects will provide a reliable and advanced Wanhua scheme for the innovative utilization of energy in the chemical industry.
Risk warning: the demand is less than expected; The commissioning progress of new projects is lower than expected; Sharp decline in product prices, etc.
Investment advice: maintain the “buy” rating. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 25.764/28.718/32.231 billion respectively, with a year-on-year growth rate of 4.5% / 11.5% / 12.2%; Diluted EPS = 8.21/9.15/10.27 yuan, and the current share price corresponds to PE = 9.8/8.8/7.8x. We are firmly optimistic that the company will build a strong position as a global chemical giant, become a world leading new material production base and maintain the “buy” rating.
