Satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) )
The event company released its annual report for 2021, and achieved an operating revenue of 28.557 billion yuan, a year-on-year increase of 165.09%; The net profit attributable to the parent company was 6.007 billion yuan, a year-on-year increase of 261.62%; The basic earnings per share is 3.50 yuan; It is proposed to distribute a cash dividend of 3.5 yuan (including tax) for every 10 shares and increase 4 shares.
The phase I project of acrylic acid and ester high boom superimposed ethane was put into operation, which boosted the substantial growth of the company’s revenue and net profit. In terms of business, the company’s functional chemicals business achieved a revenue of 19.385 billion yuan, a year-on-year increase of 281.67%; The business of polymer new materials achieved a revenue of 2.719 billion yuan, a year-on-year increase of 218.39%; The new energy materials business achieved a revenue of 233 million yuan, a year-on-year increase of 0.97%. From the perspective of specific products, the price difference (market price, tax included) of acrylic acid and butyl acrylate increased by 77.3% and 107.1% respectively year-on-year in 2021, which was in the high boom range of the industry, resulting in a significant increase in C3 business profit. Ethane cracking phase I project was put into operation in May 2021, further thickening the company’s performance.
The company continues to deepen the layout of high-quality projects and endow them with long-term growth attributes. The company accelerates the construction of Jiangsu Lianyungang Port Co.Ltd(601008) Petrochemical phase II project, including 400000 T / a high-density polyethylene, 730000 T / a ethylene oxide and Shanghai Pudong Development Bank Co.Ltd(600000) T / a styrene. At present, the installation of main equipment has been completed, and the pilot production is expected to be completed in the middle of 2022; Deepen the layout of 180000 T / a acrylic acid and 300000 t / a acrylic acid projects, and build 800000 T / a PDH, 800000 T / a butyl octanol, 120000 T / a neopentyl glycol and supporting devices, which are expected to be completed by the end of 2023. At the same time, the first phase of the green new material industrial park project supporting the ethane project, including 100000 t / a ethanolamine, 400000 T / a polystyrene, 150000 T / a battery grade carbonate and other devices, has been under construction, and the trial production is planned to be completed in the third quarter and fourth quarter of 2022. With the gradual release of high-quality projects, the company continues to grow.
The by-product hydrogen resources help the company build a green and low-carbon production demonstration base. The company will make full use of the by-product hydrogen resources in the production of lightweight raw materials. First, plan the hydrogen energy utilization demonstration projects in the park, including hydrogen energy shuttle bus for employees’ commuting, hydrogen energy storage and other projects; Second, build circular economy and renewable energy utilization in the park, provide hydrogen supply for enterprises in the park, and reduce carbon dioxide emissions caused by hydrogen production in the park; Third, plan the development of chemicals with hydrogen as raw material, such as electronic hydrogen peroxide, using nitrogen reaction in ethylene oxide production to provide synthetic ammonia for acrylonitrile, and using carbon dioxide in ethylene oxide production to produce methanol to provide raw materials for DMC, so as to form industrial chain coordination and build a green and low-carbon production demonstration base.
The company continued to maintain a high level of performance from January to February. The company announced that after preliminary accounting, it is expected to achieve a total operating revenue of about 5.1 billion yuan from January to February 2022, with a year-on-year increase of about 147%; The net profit attributable to the parent company is expected to be about 1 billion yuan, with a year-on-year increase of about 138%. We believe that the substantial year-on-year increase in performance is mainly due to the increase in performance brought by ethane phase I project on the one hand and the year-on-year expansion of price difference between acrylic acid and ester on the other hand.
The investment proposal predicts that the company’s revenue from 2022 to 2024 will be 39.5 billion yuan, 49.4 billion yuan and 51.2 billion yuan respectively; The net profit attributable to the parent company was 7.97 billion yuan, 10.07 billion yuan and 11.11 billion yuan respectively, with a year-on-year change of 32.7%, 26.3% and 10.4%; EPS is 4.64, 5.85 and 6.46 yuan respectively, and the corresponding PE is 9.2, 7.3 and 6.6 times respectively, maintaining the “recommended” rating.
Risk tips: the risk of sharp fluctuation of propane price, the risk of sharp rise of ethane price, the risk of falling product price difference, the risk that the output of new projects is less than expected, etc.
