\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 309 Wanhua Chemical Group Co.Ltd(600309) )
Substantial growth in performance in the 21st year: in 2021, the company achieved a total operating revenue of 145.54 billion yuan, a year-on-year increase of 98.2%, and a net profit attributable to the parent company of 24.649 billion yuan, a year-on-year increase of 145.5%. The substantial year-on-year increase in revenue and profit is mainly due to the large output growth of all sectors of the company in 2021, including the production capacity of Yantai 500000 tons of MDI and 255000 tons of polyether in polyurethane sector, and the large-scale ethylene integration project in petrochemical sector, etc; At the same time, the petrochemical and chemical industry enjoyed a good boom in 2021, and the profits of all product lines increased significantly. Among them, Q4’s single quarter profit was 5.11 billion yuan, which continued to decline month on month after experiencing a high of 6.91 billion yuan in the second quarter of the 21st century, mainly due to the decline of MDI and other prices of polyurethane sector and the sharp increase of raw material LPG price of petrochemical sector.
The long-term development is steadily improving: the company’s R & D expenses reached 3.17 billion yuan in 2021, with a significant year-on-year increase of 55.1%, including staff expenses, material consumption and depreciation expenses, with 805 patent applications in the whole year. It can be seen that Wanhua has made great progress in R & D investment and strength after the operation of Cishan base. At the same time, the company’s capital expenditure reached 27 billion yuan in 21 years, a record high. In addition to further investment in existing industries such as polyurethane, the degradable plastic industry chain and battery material projects representing the new development direction are also progressing smoothly. These inputs will continue to drive the company to achieve long-term growth.
22 years is still worth looking forward to: after the petrochemical industry experienced the boom peak in 2021, the demand performance was poor under the influence of interest rate increase and epidemic situation, the cost side oil and gas prices were fluctuating sharply, and the market was pessimistic about the industry’s profitability. However, we believe that after the significant change of energy prices, the production cost of chemical industry in Europe will increase significantly, which will fundamentally change the global cost curve of most chemical products, including MDI, TDI, PVC and so on. With the marginal recovery of demand after 22q1, the profitability of Chinese production enterprises may exceed market expectations. In addition, oil and gas prices also peaked in 22q1. As the temperature warms up and the conflict between Russia and Ukraine becomes clearer, the cost side pressure is also expected to ease. Therefore, we expect that 22q1 may be the phased bottom of Wanhua’s performance.
Combined with the market situation, we raised the price and sales forecast of polyurethane and petrochemical products, raised the EPS forecast of 22-23 years to 7.60 and 9.12 yuan (the original forecast of 7.26 and 7.98 yuan), and added the 24-year forecast of 10.35 yuan. The valuation of the comparable company in 22 years is 10 times. Due to Wanhua’s more prominent long-term roe and historical growth, a 15% valuation premium is given, and the target price of 91.2 yuan is given according to the 12 times PE of the company in 22 years, maintaining the buy rating.
Risk tips
The change of epidemic situation is less than expected; Macroeconomic risks; Crude oil price fluctuation risk; New project progress risk. Profit forecast and investment suggestions
