\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Event:
Recently, the company released its annual report for 2021, realizing an operating revenue of 23.3 billion yuan, a year-on-year increase of 46.29%; The net profit attributable to the parent company was 7.07 billion yuan, a year-on-year increase of 52.95%; The gross profit margin of sales was 42.21%, a year-on-year decrease of 2.89%; The net profit margin of sales was 30.35%, with a year-on-year increase of 1.33%
Investment summary:
The volume and price of main products rose simultaneously to promote performance growth
The volume and price of polyolefin and coke, the company’s main products, rose simultaneously, of which the sales volume of polyolefin increased by 42100 tons year-on-year, and the price increased by 13.72% year-on-year; Coke sales increased by 117100 tons year-on-year, and the price increased by 69.70% year-on-year. For the company’s profit thickening effect is obvious. We believe that the global oil price will remain at $70-90 / barrel in the next two years, which will form a certain support for the price of polyolefin. With the promotion of supply side reform, the price of coke is expected to run at a high level in the next two years, and the prosperity of the company’s main products is expected to continue.
Although the price of raw materials rose significantly in 2021, the company took a variety of ways to reduce the impact of the cost side. For example, negotiate to purchase high calorific value coal from Xinjiang as a supplement to power coal, and establish a new channel for “Xinjiang coal into Nanjing”; In terms of coking coal, the company flexibly adjusted the ratio of fat coal and lean coal, expanded the output of self-produced coal, reduced the procurement of high-quality coking coal, and then reduced the cost. The overall gross profit margin remained at a high level.
Implementation of major projects to expand the company’s leading edge
The 3 million T / a coking polygeneration project has been successfully constructed and is expected to be put into operation in the first half of 2022
Ningdong phase III 500000 T / a coal to olefin and 500000 t C2-C5 comprehensive utilization to olefin project is expected to be put into operation in the first half of 2023, including 250000 T / a EVA unit
The 4 million T / a coal to olefin demonstration project in Inner Mongolia is expected to be implemented. According to the implementation plan for transformation and upgrading of chemical industry in Inner Mongolia Autonomous Region (20212025) issued at the end of October 2021, the 4 million T / a coal to olefin project in Inner Mongolia will be accelerated. At present, the project approval has entered the final stage, and the construction can be started after the EIA approval. At that time, the scale and cost advantages of the company are expected to be further expanded.
Yanshen industrial chain and layout green hydrogen expand growth space
The company will further enrich the industrial chain and improve profitability and risk resistance. By introducing or acquiring high-end fine chemical industry projects outside China to promote the development of high-end fine chemicals, the revenue contribution of fine chemicals business is expected to continue to increase in the future.
The company took the lead in arranging the green hydrogen project and exploring a new integrated development mode of new energy and modern coal chemical industry. Among them, the integrated Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen production, energy storage and comprehensive application demonstration project is the actual deployment of the dual carbon strategy. Since 2022, the company plans to increase the green hydrogen production capacity by 300 million standard cubic meters every year, increase and reduce 5% of the total carbon emission of chemical plants every year, and strive to take the lead in realizing enterprise carbon neutralization in 20 years, which will provide a broader development space for the enterprise.
Investment strategy: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be 8.57 billion yuan, 10.72 billion yuan and 14.32 billion yuan respectively, and the earnings per share (EPS) will be 1.17 yuan, 1.46 yuan and 1.95 yuan respectively, corresponding to PE of 13.2 yuan, 10.5 yuan and 7.9 yuan respectively. Considering that many projects of the company are expected to be implemented, the profits of olefin and coking industry are good for a long time, and the “buy” rating is maintained.
Risk warning: the risk of sharp decline in oil price, the risk of fluctuation in raw material price and the risk that the production is not as expected.
