\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 141 Hubei Xingfa Chemicals Group Co.Ltd(600141) )
Key investment points
Event: the company announced that in 2021, it achieved a revenue of 23.61 billion yuan, a year-on-year increase of 28.9%, and a net profit attributable to the parent company of 4.24 billion yuan, a year-on-year increase of 595.1%.
Supply is limited, demand recovers, and profit centers of organosilicon and glyphosate rise. The strong demand for organic silicon has driven the price and volume of organic silicon of the company to rise. In 2021, the sales volume of organic silicon was 159000 tons, a year-on-year increase of + 27.8%, and the average price excluding tax was 26000 yuan / ton, a year-on-year increase of + 50.1%. Overseas supply was limited and downstream demand recovered. In 2021, China exported 641000 tons of other organic phosphorus and derivatives, a year-on-year increase of + 9.4%, driving the rise of glyphosate price. The average price of glyphosate excluding tax in 2021 reached 37000 yuan / ton, a year-on-year increase of + 95.9%. With the revision and implementation of laws and regulations related to genetically modified crops in China, the commercialization of genetically modified crops is gradually opened, which is expected to further drive the demand for glyphosate in China.
Make up for the shortage of raw materials, and the scale of traditional business has increased steadily. Yidu Xingfa phase II (400000 tons of ammonium phosphate, 1.2 million tons of sulfuric acid and 400000 tons of phosphoric acid) and Xingxing Lantian 400000 tons of synthetic ammonia, a joint-stock company, have been successfully put into operation, filling the bottleneck of raw material supply. In 2021, the sales volume of ammonium phosphate was + 12.6% year-on-year, and the gross profit margin was 16.1%, up + 8.3% year-on-year. In addition, the company acquired two metal silicon production enterprises around September 2021. At present, it has a production capacity of 80000 tons of metal silicon, which basically matches the company’s demand for silicone raw materials and further helps reduce costs and increase efficiency. The 2 million ton capacity of Houping phosphate rock under construction will be put into operation in the second half of 2022. At present, the phosphate rock has reached 650 yuan / ton, which is + 75.7% higher than the average price in 2021, highlighting the tight supply of phosphate rock. The new phosphate rock will provide raw material guarantee for the long-term development of phosphorus chemical industry of the company; Inner Mongolia Xingfa 50000 tons of glyphosate and 400000 tons of silicone monomer are expected to be put into operation in the second quarter of 2022 and the end of 2023 respectively, which will drive the steady growth of traditional business.
Layout electronic chemicals and new energy, and drive into the fast lane of growth. The company has a capacity of 80000 tons of electronic chemicals and has passed the certification of Semiconductor Manufacturing International Corporation(688981) , Huahong group and other customers. In 2021, the electronic chemicals business achieved a total revenue of 370 million yuan, a year-on-year increase of 183.2%. The company still has 80000 tons of electronic chemicals under construction and will be put into operation by the end of 2022. With the rapid development of China’s semiconductor industry, electronic chemicals will bring incremental performance. In terms of new energy, relying on its own advantages of phosphate rock and purified phosphoric acid resources, combined with Zhejiang Huayou Cobalt Co.Ltd(603799) overseas lithium mineral resources, the company plans to build 500000 tons of iron phosphate and 500000 tons of lithium iron phosphate production capacity in Yichang, Hubei Province to enter the field of new energy. Under the background of booming downstream demand for new energy, the company will drive into the fast lane of growth.
Profit forecast and investment suggestions. It is estimated that the company’s EPS from 2022 to 2024 will be 4.95 yuan, 5.95 yuan and 6.72 yuan. The production capacity and reserves of phosphate rock resources of the company rank in the forefront of the industry. The layout of phosphorus chemical industry chain is complete and more independent. At the same time, it cuts into the energy track with high growth. It is given a “buy” rating for the first time, and the target price is 45 yuan.
Risk warning: the price of raw materials may fluctuate sharply, the production capacity under construction may be put into operation or less than expected, and the epidemic situation may affect the demand.
