\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 309 Wanhua Chemical Group Co.Ltd(600309) )
Event description
The company issued an annual report. In 2021, the operating revenue was 145538 billion yuan, a year-on-year increase of 98.19%, and the net profit attributable to shareholders of listed companies was 24.649 billion yuan, a year-on-year increase of 145.47%. In 2021, some chemical plants in the world were affected by extreme weather, epidemic and other factors, resulting in a supply shortage, resulting in fluctuations in the global chemical product supply chain, phased imbalance between supply and demand, and an increase in the price of chemical products. The technical transformation of Yantai MDI unit and the production of new production capacity and new units such as one million tons of ethylene have improved the supply capacity of the global market. At the same time, relying on the global supply chain and channel layout for many years, the company has overcome many adverse factors such as the epidemic situation, orderly ensured the market supply of global core customers, and the volume and price of major products such as polyurethane, petrochemical and fine chemicals have risen simultaneously, The company’s operating revenue and profit have increased significantly.
In 2021, the company realized a net profit attributable to the parent company of 24.649 billion yuan, a year-on-year increase of 145.47%
In 2021, the company’s profitability increased significantly, realizing a net profit attributable to the parent company of 24.649 billion yuan, a year-on-year increase of 145.47%. In a single quarter, the revenue of 2021q4 company was 38.219 billion yuan, an increase of 57.92% year-on-year and a decrease of 3.64% month on month; The gross profit was 6.53 billion yuan, a year-on-year decrease of 23.64%, a month on month decrease of 38.78%, and the net profit attributable to the parent company was 5.107 billion yuan, a year-on-year increase of 8.84% and a month on month decrease of 15.04%.
In 2021, the company’s financial expenses were 1.479 billion yuan, with a year-on-year increase of 37.37%, mainly due to the increase of bank loan interest due to the increase of working capital; The management fee was 1.892 billion yuan, a year-on-year increase of 33.21%, mainly due to the increase of labor, information and other expenses; The sales expense was 1.052 billion yuan, with a year-on-year increase of 33.43%, mainly due to the increase of labor, travel and other expenses of sales personnel. The company’s net cash flow from operating activities was 27.922 billion yuan, a year-on-year increase of 65.71%, mainly due to the increase in cash received from the sale of goods and the provision of labor services in the current period; The net cash flow from financing activities was -28.758 billion yuan, a year-on-year decrease of 11.24%.
Polyurethane sales continued to grow, and MDI prices generally showed an upward trend
The company’s revenue of polyurethane products in 2021 was 60.492 billion yuan, a year-on-year increase of 75.76%. The increase in revenue and cost in 2021 compared with the previous year is mainly due to the introduction of 1.1 million tons of MDI technological transformation and new production capacity in Yantai in 2021, the increase in the sales volume of polyether polyols, and the rise in the prices of products and raw materials; The output of polyurethane series products of the company was 4.01 million tons, with a year-on-year increase of 37.40%, and the sales volume was 3.89 million tons, with a year-on-year increase of 32.73%. The gross profit of polyurethane sector was 21.215 billion yuan, a year-on-year increase of 41.67%, and the gross profit margin was 35.07%, a year-on-year increase of 0.61 percentage points. The increase in gross profit was mainly due to the year-on-year increase in product prices and the scale effect brought by the increase in production capacity and sales volume.
By the end of 2021, the company has 1.1 million T / a MDI and 300000 t / a TDI units in Yantai, 1.2 million T / a MDI units in Ningbo, 350000 T / a MDI and 250000 T / a TDI units in BC, Hungary and 100000 t / a TDI units in Fujian. The company is currently the world’s largest MDI supplier and the world’s third largest TDI supplier.
In 2021, the national MDI price fluctuated alternately due to the extreme weather experienced by foreign MDI manufacturers, the fluctuation of China’s MDI downstream inventory, manufacturers’ parking and maintenance, the national energy consumption dual control policy, and the rebalancing of market supply and demand structure. By the end of 2021, the pure MDI price was 20700 yuan / ton and the aggregate MDI price was 20300 yuan / ton.
In 2021, MDI prices generally showed an upward trend. During this period, the company completed the technical transformation and capacity expansion of Yantai MDI device of 1.1 million tons / year, which effectively guaranteed the market supply of MDI. In terms of import and export, due to the impact of extreme weather in North America in 2021, the suspension of multiple sets of MDI equipment caused a shortage of global supply, resulting in short-term supply imbalance. China’s MDI imports decreased significantly and its exports increased significantly. In 2021, the import volume and export volume of aggregate MDI were 298000 and 1014000 tons respectively, with a year-on-year decrease of 19% and an increase of 65%. In 2021, the import volume and export volume of pure MDI were 70000 tons and 121000 tons, with a year-on-year decrease of 28% and an increase of 23%.
At the same time, the demand for sole stock solution and TPU in the downstream of pure MDI increased steadily, and spandex provided incremental support for the demand for pure MDI in China. In the long run, the supply and demand pattern of MDI is good. At present, the Asia Pacific region has become the world’s largest polyurethane consumer market, and the markets in North America and Europe are gradually saturated. The development focus in recent years and in the future will be concentrated in the Asia Pacific region. Wanhua, as the absolute leading producer of MDI in the world, has absolute capacity and location advantages, and has become the main source of global MDI growth.
The million ton ethylene project was put into operation, and the profit of the petrochemical sector increased rapidly
The revenue of the company’s petrochemical products in 2021 was 61.409 billion yuan, a year-on-year increase of 166.01%, and the cost in 2021 was 50.916 billion yuan, a year-on-year increase of 130.36%. The revenue and cost of the company’s petrochemical products increased compared with the previous year, mainly due to the production of one million ton ethylene plant and the increase of petrochemical product sales, And the rise in the price of petrochemical products and LPG caused by the rise in the price of crude oil superimposed by the global phased imbalance between supply and demand; The output of petrochemical products of the company was 4 million tons, with a year-on-year increase of 79.49%, and the sales volume was 3.9 million tons, with a year-on-year increase of 74.81%. The gross profit of the petrochemical business segment was 10.493 billion yuan, a year-on-year increase of 968.14%, and the gross profit margin was 17.09%, a year-on-year increase of 12.83 percentage points. The increase in gross profit margin was mainly due to the sharp rise in the price of petrochemical products year-on-year and the change in product structure and scale effect caused by the production of one million tons of ethylene.
At present, the company’s petrochemical business mainly develops C2, C3 and C4 olefin derivatives, and is committed to becoming the most influential supplier of high-end olefins and derivatives with unique competitive advantages. Relying on world-class PO / AE integrated plant and large ethylene plant, Wanhua continues to expand C2, C3 and C4 industrial chains; Take 1 million T / a ethylene and 750000 T / a propane dehydrogenation units as the source to realize industrial chain linkage and value chain coordination.
In February this year, the environmental impact assessment of Wanhua Chemical Group Co.Ltd(600309) propane / Butane cavern project was publicized for the first time. Wanhua Fujian Industrial Park plans to invest 2.316 billion yuan to build 1.2 million cubic propane underground caverns (including two Shanghai Pudong Development Bank Co.Ltd(600000) cubic propane underground caverns) and one 500000 cubic butane underground cavern. On March 4, 2022, Fuzhou Ecological Environment Bureau planned to reply to the environmental impact assessment of the wharf tank farm project of Wanhua Chemical Group Co.Ltd(600309) (Fujian) wharf Co., Ltd. According to the plan, the project will have the annual turnover capacity of 1.05 million tons of benzene, 450000 tons of aniline, 1.2 million tons of caustic soda and 400000 tons of methanol. At the same time, the company focuses on modified PP, MIBK, isoflurone and other products with higher added value in petrochemical products, gradually strengthens the existing petrochemical industry chain cluster and expands the scale advantage.
The multi-point layout of new materials is expected to become a new performance growth point
The revenue of the company’s fine chemicals and new materials products in 2021 was 15.464 billion yuan, with a year-on-year increase of 94.18%, and the cost in 2021 was 12.177 billion yuan, with a year-on-year increase of 88.65%. The revenue and cost of the company’s fine chemicals and new materials products increased compared with the previous year, mainly including ADI, waterborne resin Increase in sales volume of fine chemicals and TPU related products;; The product output of the company’s fine chemicals and new materials business was 790000 tons, with a year-on-year increase of 37.97%, and the sales volume was 760000 tons, with a year-on-year increase of 37.01%.
The gross profit of the petrochemical business segment was 10.493 billion yuan, a year-on-year increase of 37.01%, and the gross profit margin was 21.25%, a year-on-year increase of 2.31 percentage points. The gross profit margin increased, mainly due to the general rise in product prices and changes in product structure.
Wanhua Chemical Group Co.Ltd(600309) specify R & D investment in the field of new material products, speed up the construction of projects under construction and accelerate the industrial transformation of new products. As the world’s leading TPU supplier, its products are widely used; The first phase of the modified plastic project planned and constructed by the company in Meishan, Sichuan has been officially put into operation, and the second phase of 60000 tons of PBAT biodegradable polyester and 10000 tons of lithium battery ternary materials are under intensive construction. At present, the company has laid out sap, PC, PMMA, TPU, HDI and other production capacity. Recently, Wanhua Chemical Group Co.Ltd(600309) plans to join hands with Baowu carbon industry to set up a new joint venture Zhejiang Baowan Carbon Fiber Co., Ltd. in Zhejiang to layout the polyacrylonitrile (Pan) based carbon fiber market, in which Baowu carbon industry holds 51% equity and Wanhua Chemical Group Co.Ltd(600309) holds 49% equity. Through the cooperation with Baowu carbon industry, Wanhua will enter the carbon fiber market and further expand its territory in the field of new materials. With the continuous expansion and landing of the company’s new material business, with the company’s good quality and strong supply system, its competitiveness in the global market is further improved, and the new material business is expected to become a new performance growth point of the company.
Investment advice
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 24.885 billion yuan, 29.771 billion yuan and 33.648 billion yuan respectively, with a year-on-year growth rate of 1.0%, 19.6% and 13.0%. The corresponding PE is 10.14, 8.47 and 7.50 times respectively. Maintain the “buy” rating.
Risk tips
The risk of increasing the difficulty of internal management caused by the expansion of the company’s manpower scale; The risk of large-scale diffusion of the company’s core products due to technological breakthroughs or joint ventures; The production progress of the project is less than expected; The product price fluctuates greatly; Large fluctuations in oil prices; Plant force majeure risk.
