Satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) )
With C2 + C3 dual wheel drive, the company has entered a period of rapid development
Event: on March 22, 2022, satellite chemical released its annual report for 2021: the operating revenue was 28.557 billion yuan, a year-on-year increase of + 165.09%; The net profit attributable to the shareholders of the listed company was 6.007 billion yuan, a year-on-year increase of + 261.62%; The weighted average return on net assets was 36.42%, an increase of 20.49 percentage points year-on-year. The gross profit margin of sales was 31.72%, with a year-on-year increase of 3.02 percentage points; The net profit margin of sales was 21.06%, with a year-on-year increase of 5.67 percentage points.
Among them, Q4 achieved a revenue of 8.539 billion yuan in 2021, a year-on-year increase of + 165.10% and a month on month increase of – 7.68%; The net profit attributable to the parent company was 1.751 billion yuan, a year-on-year increase of + 130.71% and a month on month increase of – 17.79%; The weighted average return on net assets was 9.44%, an increase of 3.0 percentage points year-on-year and a decrease of 3.35 percentage points month on month. The gross profit margin of sales was 31.04%, a year-on-year decrease of 6.68 percentage points and a month on month decrease of 2.31 percentage points; The net sales interest rate was 20.55%, a year-on-year decrease of 2.99 percentage points and a month on month decrease of 2.51 percentage points.
Comments:
C2 operated stably in the first stage, and the company’s performance achieved rapid growth
In 2021, the company achieved a 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 high growth of performance is due to the launch of new production capacity of 180000 T / a acrylic acid and 300000 t / a acrylic acid at the beginning of 2021 and the smooth operation of phase I of C2 project in May 2021, which has greatly improved the production and sales of the company. In 2021, the company sold 3.1755 million tons of chemicals and new materials, with a year-on-year increase of 92.74%. On the other hand, due to the tight supply and demand, the company’s key products acrylic acid and ester ushered in a business cycle. According to wind, the average market price of acrylic acid in 2021 reached 1182918 yuan / ton, a year-on-year increase of 70.52%, and the price difference reached 759913 yuan / ton, a year-on-year increase of 81.36%; The average market price of butyl acrylate reached 1625438 yuan / ton, a year-on-year increase of 94.23%, the price difference reached 182029 yuan / ton, a year-on-year increase of 277.36%, and the profitability was greatly improved.
By sector, in 2021, the company’s functional chemicals achieved a revenue of 19.385 billion yuan, a year-on-year increase of + 281.67%, and the gross profit margin reached 37.58%, an increase of 5.98 percentage points year-on-year; New polymer materials achieved a revenue of 2.719 billion yuan, a year-on-year increase of + 218.39%, and a gross profit margin of 33.21%, an increase of 5.16 percentage points year-on-year; New energy materials achieved a revenue of 233 million yuan, a year-on-year increase of + 0.97%, and a gross profit margin of 47.26%, an increase of 6.66 percentage points year-on-year. In terms of period expenses, the company’s sales / management / financial expense ratio in 2021 was 0.21% / 5.60% / 1.76% respectively, with a change of – 2.29% / – 1.40% / + 0.01% compared with the same period last year, and the expenses were well controlled; Meanwhile, in 2021, the net cash flow generated from the company’s operating activities reached 3.668 billion yuan, an increase of 806.08% year-on-year, mainly due to the increase in profits in the current period
The acrylic acid boom continues, and the comprehensive competitiveness of C3 leader continues to increase
The company is the leader of C3 industry in China. At present, it has 900000 T / a propylene capacity, 450000 T / a polypropylene capacity, 660000 T / a acrylic acid capacity and 750000 T / a acrylic acid capacity. It has prominent scale and technical advantages in the field of acrylate. In 2022, acrylic acid and ester continued to boom. According to wind, as of March 21, the average market price of 2022q1 acrylic acid reached 1400375 yuan / ton, a year-on-year increase of + 54.32% and a month on month decrease of – 6.15%; The price difference between acrylic acid and propane reached 889974 yuan / ton, with a year-on-year increase of + 69.28% and a month on month increase of – 10.14%. Affected by the shutdown of downstream enterprises during the Spring Festival holiday, although the price difference of acrylic acid decreased month on month, it still increased significantly year-on-year, showing high profitability. At the same time, the company is committed to the development and popularization of acrylic acid downstream products. Currently, it has 210 thousand tons of polymer emulsion and 150 thousand tons / year SAP capacity. After more than ten years of research and innovation, the company’s SAP products have been replaced by domestic products, and have become a well-known brand supplier in China. In order to strengthen the competitiveness of new polymer materials, fill the propylene gap and form a complete industrial chain of acrylate, the company will accelerate the construction of Pinghu new energy and new materials integration project (800000 T / a PDH, 800000 T / a butyl octanol and 120000 T / a neopentyl glycol). It is expected to be completed by the end of 2023, and the C3 competitiveness of the company will continue to increase.
C2 phase II and supporting new materials will be put into operation soon, injecting growth power into the company
The company has steadily promoted its diversified development strategy and actively arranged C2 industrial chain projects. In May 2021, the first phase of C2 project was completed and put into operation. The production capacity mainly includes one set of 400000 T / a HDPE unit and two sets of 730000 / 910000 T / a EO / EG units. The downstream supporting 250000 T / a polyether large monomer unit was also put into operation in October 2021, contributing to the performance increment of the company. At the same time, the company accelerated the construction of phase II of C2 project, which mainly includes 400000 T / a HDPE, 730000 T / a ethylene oxide and Shanghai Pudong Development Bank Co.Ltd(600000) T / a styrene. At present, the main equipment has been installed and is expected to be put into trial production in 2022. In order to give full play to the advantages of the industrial chain and improve the added value of products, the company has laid out the green new material industrial park project based on the C2 project. The first phase (phase I) of the project mainly includes 100000 t / a ethanolamine, 400000 T / a polystyrene, 150000 t / a battery grade carbamate, etc. at present, the construction has been started, and the trial production is expected to be completed in the third and fourth quarters of 2022; At the same time, there are 100000 tons / year of ethanolamine and 100000 tons / year in the green new material industrial park α Olefins and supporting Poe, Shanghai Pudong Development Bank Co.Ltd(600000) T / a battery grade carbonate and 400000 T / a polystyrene are also continuously promoted. C2 phase II and downstream deep processing projects have been put into operation one after another. On the one hand, the company’s production capacity has been greatly increased and growth momentum has been injected into the company’s development. At the same time, the production of ethanolamine, carbonate and other new materials will form a downstream product matrix of ethylene oxide with ethylene glycol and polyether monomers, give full play to the advantages of the industrial chain, facilitate the switching between products, maximize the profits of product series, and greatly enhance the resistance to the risk of price fluctuation of a single product
Under the background of double carbon, green by-product hydrogen welcomes new opportunities for development
In the context of carbon neutralization and carbon peak, the company actively responds to the national hydrogen energy policy and the growing hydrogen energy demand of the market, and actively develops the hydrogen energy business by using the surplus hydrogen in the production process. At present, the company’s 900000 ton PDH unit can produce 72000 tons of hydrogen, and the first phase of Jiangsu Lianyungang Port Co.Ltd(601008) c2 project can produce 70000 tons of hydrogen. When the second phase of C2 project and 800000 ton PDH unit are put into operation, the company’s hydrogen output will reach nearly 300000 tons. The company makes full use of the green hydrogen energy produced by the production of light raw materials. At present, the company mainly makes layout in three aspects. First, plan hydrogen energy utilization demonstration projects in the park, including hydrogen energy shuttle bus, hydrogen energy storage and other projects suitable for employees’ commuting; Second, build a circular economy and renewable energy utilization in the park, provide green 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 the coordination of industrial chain and build a green low-carbon production demonstration base.
At present, the hydrogen peroxide produced by the company has been widely used in the pre electronic chemicals and photovoltaic fields of G1 and G2 in East China market.
Adhere to science and technology to create the future and build a satellite science and technology innovation system
The company adheres to the concept of “science and technology creates the future”, cultivates talent capital and drives innovation. The company’s R & D expenses reached RMB 12.691 billion, accounting for 12.63% of the company’s revenue in 2021. In 2021, the company successfully realized the application of the self-developed new process of acrylic acid and ester, and the project with an annual output of 180000 tons of acrylic acid and 300000 tons of acrylic acid was successfully started at one time; Realize the leading long-term stable operation of PDH device in the world; Realize the successful start-up of the first phase project of Jiangsu Lianyungang Port Co.Ltd(601008) Petrochemical Co., Ltd. and maintain good operation; α- Olefin and Poe projects have completed pilot design, obtained invention patent authorization and owned independent intellectual property rights. The company continues to enrich its technology R & D team. At present, there are 813 technology R & D teams. Within the second five-year plan of the satellite, the company also plans to introduce 2 academicians and 100 doctors to complete the construction of the satellite global R & D center and build a R & D and innovation system of low-carbon chemical new materials technology company
Investment advice and profit forecast
It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 8.149, 10.673 and 13.363 billion yuan respectively, and the EPS will be 3.68, 4.82 and 6.03 yuan / share, corresponding to 12, 9 and 7 times of PE, maintaining the “buy” rating.
Risk tips: the implementation of policies, the construction progress of new production capacity is not up to expectations, the contribution performance of new production capacity is not up to expectations, the price of raw materials fluctuates, the change of environmental protection policies, the economy drops sharply, and the price of crude oil fluctuates sharply
