\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 117 China National Chemical Engineering Co.Ltd(601117) )
New material projects have been solidly promoted, and the second growth curve has accelerated revaluation. The company announced that the three major new material projects are progressing smoothly, including: 1) adiponitrile project has entered the staggered period of intermediate delivery and trial production. It is expected to produce qualified acrylonitrile products in the middle of March this year, qualified hexanediamine products at the end of March and qualified adiponitrile products in the first ten days of April. 2) the aerogel project was successfully launched in February 27th, with a total sales of about 15 thousand and 500 cubic meters of aerogels. 3) The PBAT project has been successfully mechanically completed and has entered the stage of start-up and trial production as a whole. In addition, it has recently announced that it plans to invest in the construction of Fujian Quangang propylene oxide and Yichang new material innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) Park, and the technical strength of new materials will be confirmed again. The company has abundant follow-up technical reserves. It is focusing on a number of medium and high-end high value-added product technology fields such as polyolefin elastomer (POE), environmental protection catalyst, ASA resin, polyimide, flame retardant nylon, nylon 12, waste gasification, hydrogen energy storage and transportation, and orderly promote the small-scale research and development, pilot scale-up and industrial transformation of key technologies. In the future, it will continue to output “technology + industry” and open the second growth curve, with great potential. According to the “14th five year plan” of the group, the target of new material industry will account for 15% of the total revenue by 2025, which is expected to reach about 36 billion yuan. Considering the higher net interest rate of industry compared with engineering, the profit contribution is expected to significantly exceed 15%.
The order revenue increased strongly in the beginning of the year, and the coal chemical business is expected to benefit from the policy and oil price catalysis. The company announced that the newly signed contract amount from January to February 2022 was 76.7 billion yuan, a significant increase of 88% year-on-year, with a growth rate of 4.6 PCT compared with the previous month. The newly signed contract in February was 25.6 billion yuan, with a growth rate of 97%, 14.4 PCT compared with January. From January to February, the company achieved a total operating revenue of 23.9 billion yuan, an increase of 58% at the same time, maintaining a strong growth momentum. Last year, the central economic work conference pointed out that we should base ourselves on the basic national conditions of coal, pay attention to the clean and efficient utilization of coal, make scientific assessment, and exclude the new renewable energy and raw material energy from the total energy consumption control, so as to benefit the development of coal chemical industry with coal as raw material. At present, due to regional conflicts and other factors, the crude oil price is expected to run at a high level, improve the profit expectation of the coal chemical industry, and the capital expenditure of relevant enterprises is expected to increase significantly. According to the official account of the company, the company is the leading global coal chemical engineering company. It has undertaken over 95% of China’s coal chemical engineering design and construction tasks. It ranks first among the global oil and gas engineering construction companies, and is expected to benefit from the accelerated construction of the coal chemical industry in the future.
The objectives of the 14th five year plan are clear, and the incentive to buy back shares shows confidence. The company’s official account has disclosed the “14th Five-Year plan”. The goal is to build a world-class competitive engineering company with the global competitiveness in the integration of R & D, investment, construction and operation, helping the group enter the world top five hundred. According to the threshold standard of the world’s top 500 in 2021 (revenue of about 240 billion yuan), the compound growth rate of the group’s revenue target in the “14th five year plan” is about 15% ( China National Chemical Engineering Co.Ltd(601117) listed companies account for more than 90% of the group’s revenue). In terms of the revenue structure objectives of the 14th five year plan group, chemical engineering accounts for 60%, infrastructure accounts for 18%, chemical industry accounts for 15%, modern service industry accounts for 5%, environmental governance accounts for 3%, and the proportion of new chemical materials industry has increased significantly. Considering that it is significantly higher than the net interest rate of the project, it is expected to help the company’s performance growth exceed the revenue growth. Recently, the company announced that it plans to repurchase no more than 1% of its shares for equity incentive through centralized bidding transaction. It is estimated that the repurchase amount will be 400800 million yuan, and the repurchase price will not exceed 150% of the average price of the 30 trading days before the resolution to repurchase shares. The company’s share repurchase is used to stimulate the release of positive signals, which is expected to enhance the market value power, stimulate the vitality of employees and show confidence in future development.
Investment suggestion: we expect the company to realize a net profit attributable to the parent company of RMB 4.2/64/8.2 billion from 2021 to 2023, with a year-on-year increase of 15% / 54% / 27%, and EPS of RMB 0.69/1.06/1.34 respectively. The current share price corresponding to PE is 12.5 / 8.2 / 6.4 times respectively. The company has made solid progress in new material projects. The “14th five year plan” has made clear the determination of industrial development, accelerated the revaluation of the second growth curve and maintained the “buy” rating.
Risk tip: the risk of sharp decline in oil price, the risk that the production performance of industrial projects does not meet the expectations, and the risk of repeated epidemic.
