\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 309 Wanhua Chemical Group Co.Ltd(600309) )
Event: the company released its annual report. In 2021, the company achieved sales revenue of 145538 billion yuan, an increase of 98.19% year-on-year; The net profit attributable to the shareholders of the listed company was 24.649 billion yuan, a year-on-year increase of 145.47%; Earnings per share is 7.85 yuan.
Comments:
The volume and price rose simultaneously, and the company’s revenue and profit reached a record high. Polyurethane business: the segment revenue was 60.5 billion yuan, with a year-on-year increase of + 72.75%. In terms of split, the sales volume was 3.89 million tons, with a year-on-year increase of + 32.73%, mainly due to the increment of production and sales driven by the commissioning of 1.1 million tons MDI technical transformation project in Yantai base; In terms of price, the middle price of pure / polymerized MDI in East China market is 22343 / 19871 yuan / ton, with a year-on-year increase of + 25.3% and + 37.5% respectively. Under the background of substantial price increase of raw materials (coal and raw salt), the gross profit margin of the sector is still 35.07%, highlighting the company’s pricing power in the MDI market;
Petrochemical business: the revenue of the sector was 61.4 billion yuan, a year-on-year increase of + 132.46%, and the sales volume was 3.9 million tons, a year-on-year increase of + 74.81%. The increase in sales volume is mainly due to the production of the million ton ethylene project at the end of 2020 and the heavy volume in 2021; In terms of price, the oil distribution increased by 50.46% throughout the year. The product price rose due to the sharp rise of oil price. Benefiting from the cost advantages such as storage capacity management, the gross profit margin of the sector reached 17.09%, an increase of 9.45 percentage points year-on-year.
New materials business: the revenue of the sector was 15.5 billion yuan, with a year-on-year increase of + 94.18%. ADI business became the global leader. With the large increase in the production and sales of water-based resin, the load of PC devices took the lead in the country.
Technological innovation & large capital expenditure, driving performance growth with new materials
Technological innovation is the core competitiveness of the company: in 2021, the company had 3126 R & D personnel, and invested 3 billion 170 million yuan in R & D costs, and 805 applications for inventions in China were applied for the whole year. 416 new authorized projects were completed, 1223 items of quality and efficiency enhancement projects were completed, and the main direction was centered on new high-end materials, such as carbon neutral technology, recycling and utilization of polyurethane foam, degradable materials, etc. High performance materials (nylon 12, special PC, Poe, optical grade PMMA, etc.), new energy storage and battery materials, separation and purification and other R & D projects.
With the continuous large capital expenditure driving the continuous growth of the company’s performance: by the end of 2021, the company had 27.1 billion yuan of projects under construction, 53 projects under construction in the whole year, 23 projects in medium delivery, 65.2 billion of fixed assets, and 42% of projects under construction / fixed assets. The company has sufficient endogenous growth momentum.
Profit forecast and rating:
We estimate that the company’s revenue from 2022 to 2024 will be 154.7 billion yuan, 170.8 billion yuan and 189.1 billion yuan respectively, the net profit attributable to the parent company will be 23.7 billion yuan, 26.5 billion yuan and 30.9 billion yuan respectively, and the EPS will be 7.56 yuan, 8.45 yuan and 9.84 yuan respectively. The current share price corresponds to PE of 11x, 10x and 8x respectively. It will be covered for the first time and rated as “buy”.
Risk tip: the sharp fluctuation of oil price will affect the performance of petrochemical sector; The progress of global economic recovery affects MDI demand.
