Jiangsu Eastern Shenghong Co.Ltd(000301) (000301)
Event: the company released the performance forecast for the year of 21. In the year of 21, the company is expected to realize a net profit attributable to the parent company of 4.1-5 billion yuan, with a year-on-year increase (adjusted) of 435% – 552%. comment:
The price difference between PTA and filament has expanded, and Sri Lanka has consolidated its table. The performance has increased significantly year-on-year in 21 years: the oil price has continued to rise in 21 years, driving the recovery of the industry boom and significantly improving the profitability of the company. In Q4 of 21, the average prices of PTA and polyester DTY in China were 4911 yuan / ton and 9436 yuan / ton respectively, with a year-on-year increase of + 47% and + 44% respectively; The price differences of PTA and polyester DTY were 581 yuan / ton and 2492 yuan / ton respectively, with a year-on-year increase of + 51 yuan / ton and + 468 yuan / ton respectively. In addition, Sri Lanka’s consolidated statement further increased the company’s performance: in 21 years, the prosperity of photovoltaic industry increased, and the performance of Sri Lanka, the leader of EVA, increased significantly. In 21 years, Sri Lanka’s consolidated statement increased the company’s non recurring profit and loss by about 2.7 billion yuan to 3.4 billion yuan. Looking forward to 2022, the capacity of Shenghong refining and chemical 16 million ton refining and chemical integration project will climb steadily. The company will form a whole industrial chain layout from “one drop of oil” to “one silk”, ranking among China’s refining and chemical giants, and the performance growth is expected.
Acquisition of sierbang and opening up the whole industrial chain of refining, chemical and fine chemicals: on December 31, 21, sierbang completed the transfer of ownership. At present, the company directly holds 100% equity of sierbang and fully opens up the whole industrial chain of refining, chemical and fine chemicals. The company’s main business further expands and newly increases the R & D, production and sales of olefin derivatives, which can give full play to the synergy between refining and chemical integration project and sierbang petrochemical. As the largest EVA manufacturer in China, sierbang’s EVA photovoltaic resin production capacity is stable at more than 200000 tons / year. In the long run, it will benefit from the expansion of downstream photovoltaic installation demand and considerable profit space. On December 29, 2001, the 260000 T / a acrylonitrile (III) production line in Sri Lanka was put into operation, and its overall acrylonitrile production capacity increased from 520000 T / A to 780000 T / A, ranking first in China, further consolidating Sri Lanka’s leading position in acrylonitrile industry. Under the background of rapid development of wind power industry, the gradual expansion of carbon fiber production capacity has driven the stable growth of acrylonitrile demand, which is expected to bring certain performance increment to Sri Lanka, and the company can develop in the future.
Profit forecast, valuation and rating: Sri Lanka’s consolidated statement has contributed a lot to the company’s performance, so we raised the company’s profit forecast. It is estimated that the company’s net profit from 2021 to 2023 will be 48.41 (up 162%) / 88.74 (up 24%) / 124.03 (up 29%) billion yuan respectively, equivalent to EPS of 1.00/1.49/2.09 yuan (assuming that the private placement will be completed in 2022), maintaining the “buy” rating.
Risk warning: risk of sharp fluctuation of product price; Downstream demand is lower than expected; The new project is put into operation less than expected; The additional issuance could not be successfully completed.
