Satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) )
Event: the company released the 2021 annual report. During the reporting period, the operating revenue was 28.557 billion yuan, a year-on-year increase of + 165.09%, and the net profit attributable to the parent company was 6.007 billion yuan, a year-on-year increase of + 261.62%, which were 7.67/13.59/21.30/1.751 billion yuan respectively in a single quarter. At the same time, the company plans to pay a cash dividend of 3.5 yuan (including tax) for every 10 shares and increase 4 shares for every 10 shares.
The high prosperity of the original C3 industrial chain was superimposed on the C2 industrial chain, which was put into operation, and the volume and price rose together, which promoted the substantial growth of performance. In terms of C3 industrial chain, the average price of acrylic acid and butyl acrylate in 2021 was 13195 / 17859 yuan / ton respectively, with a year-on-year increase of + 55.5% / 83.4%, and the price difference was 7765 / 2459 yuan / ton respectively, with a year-on-year increase of + 102% / 199.6%. As a leading enterprise in China's C3 industrial chain, the company has fully benefited from the high prosperity of the industry. In terms of C2 industrial chain, after years of layout, the company was finally put into operation on May 20, 2021, which not only improved the production and sales volume, but also further consolidated its leading position in the field of light hydrocarbon chemical industry.
The United States has sufficient ethane supply, stable price and sustainable profitability of C2 industrial chain. In 2021, the supply of ethane in the United States was 1768 thousand barrels per day, a year-on-year increase of + 3%. Thanks to the operation of naderland wharf exported to China Spacesat Co.Ltd(600118) chemical, the export of ethane in the United States reached 404 thousand barrels per day in 2021, a year-on-year increase of + 49%. Us ethane MB price remained stable in the range of 20-50 cents / gallon after it was separated from oil price and related to natural gas in 2013. Since 2021q3, China's coal price and international oil price have risen sharply due to tight supply and geopolitical factors. The average price of ethane MB in the United States from the beginning of 2021q3 / 2021q4 / 2022 to March 21 was 34.6/39.0/39.3 cents / gallon respectively, which remained relatively stable. At the same time, the price of ethylene and other products increased with the oil price, and the profitability of the company's C2 industrial chain increased.
New projects enhance the growth of the company. In 2022, phase II of the company's C2 industrial chain, including 400000 T / a HDPE, 730000 T / a ethylene oxide and Shanghai Pudong Development Bank Co.Ltd(600000) T / a styrene units, as well as downstream supporting 100000 t / a ethanolamine, 150000 T / a carbonate and 400000 T / a polystyrene units, 180000 T / a acrylic acid and 300000 t / a acrylate units of C3 industrial chain, will be completed and put into operation successively. In 2023, phase III of PDH, including 800000 T / a propylene and 800000 T / a butyl octanol, 120000 T / a neopentyl glycol will be completed and put into operation successively. In the long term, the company also plans to have a green chemical new material industrial park project, showing strong growth.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be 8.298/10.158/11.112 billion yuan, EPS will be 4.82/5.91/6.47 yuan, and the corresponding PE will be 9 / 7 / 7 times respectively. Considering that the company, as the leader of C2 and C3 light hydrocarbon cracking in China, new projects will be put into operation one after another, with large growth space and strong certainty, and will be covered for the first time, it will be rated as "buy".
Risk tip: the product price has fallen sharply, and the progress of new projects is less than expected.
