\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Core view
The performance is in line with expectations: Ningxia Baofeng Energy Group Co.Ltd(600989) released its annual report for 21 years. The company achieved annual revenue of 23.3 billion yuan, a year-on-year increase of + 46.3%, and net profit attributable to parent company of 7.07 billion yuan, a year-on-year increase of + 53.0%. The volume and price of main products polyolefin and coke rose at the same time, the sales of polyolefin increased by 42100 tons, and the price increased by 13.7% year-on-year; Coke sales increased by 117100 tons year-on-year, and the price increased by 69.7% year-on-year. Due to the rising price of raw material coal, the profitability of polyethylene declined, with a gross profit margin of 32.31%, a decrease of 10.46 PCT. The coking sector conducted smoothly, with a gross profit margin of 55.23%. When the freight and handling charges were included in the main cost, the gross profit margin still increased by 1.68 PCT;
Strong cost control ability: the company’s strong cost control ability is reflected in two aspects: one is to reduce the unit consumption through technical improvement. The unit consumption of methanol in the second olefin plant of the company is 2.852 tons / ton, a decrease of 0.033 tons / ton over the same period of last year, creating the best level in the industry; The unit consumption of raw coal for methanol production in the second methanol plant of the company is 1.37 tons / ton, which is 0.07 tons / ton lower than that of the previous year, and continues to maintain the low level of the industry. Second, the company paid close attention to the changes of coal market and national policies, accurately predicted the price inflection point, and timely adjusted the raw coal inventory during the high price period, which not only ensured the safety of raw coal in winter, but also avoided the loss of large inventory falling price. Continue to expand the coal transportation volume of the vehicle free transportation platform with obvious price advantages. The annual transportation volume of raw coal platform was 9.75 million tons, and the freight per ton was saved by 2.86 yuan.
New projects ensure growth: the company actively promotes the construction of major projects, speeds up the supporting closure project of 3 million T / a coal coking polygeneration project, comprehensively promotes the construction of 1 million T / a coal to olefin and C2-C5 comprehensive utilization to olefin projects in Ningdong phase III, and strives to put the coal to methanol project into operation first by the end of the year. The EIA approval of the 4 million T / a (phase I 2.6 million T / a) coal to olefin project in Inner Mongolia was obtained and the construction was officially started. Strive to complete the approval procedures of Ningdong phase IV coal to olefin project and start construction. If the planned production capacity is put into operation as scheduled, the company will have a production capacity of 6.7 million tons of coal to olefins and 7 million tons of coke.
Profit forecast and investment suggestions
Combined with the current coal price and polyolefin price, we adjusted the company’s EPS from 2022 to 2024 to 1.12, 1.49 and 1.84 yuan respectively (the original forecast was 1.13, 1.49 and – yuan), and the average PE of the comparable company in 22 years was 12 times. Considering the leading position and high growth of the company, we gave 30% premium and 16 times PE in 22 years, and the corresponding target price was 17.92 yuan (the original target price was 16.90 yuan), maintaining the buy rating.
Risk tips
Decline in product demand; Coal prices rose sharply; The approval and construction progress of new projects are less than expected.
