Satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) )
Event: the company released its 2021 annual report, and achieved a revenue of 28.557 billion yuan in 2021, a year-on-year increase of + 165.1%; The net profit attributable to the parent company was 6.007 billion yuan, a year-on-year increase of + 261.6%; The gross profit margin was 31.7%, year-on-year + 3.0pct; The net interest rate was 21.1%, with a year-on-year increase of + 5.7pct. Among them, 21q4 realized a net profit attributable to the parent company of 1.751 billion yuan, with a month on month ratio of + 130.7% / – 17.8% respectively. The company plans to distribute a cash dividend of 3.50 yuan (including tax) for every 10 shares and increase 4 shares for every 10 shares to all shareholders with capital reserve.
C2 is put into operation in large quantities to improve profits, and C3 high gas prices rise simultaneously. In terms of C2 business, the C2 phase I project of Jiangsu Lianyungang Port Co.Ltd(601008) Petrochemical has operated well since it was put into operation, steadily improving the profitability of the company. In 21 years, the price of ethane remained basically stable, the average price of ethylene was 1036 euros / ton, up more than 70% year-on-year, and the cost advantage of ethane cracking was further expanded. In terms of C3 business, the volume and price of acrylic acid and ester rose simultaneously to maintain a high atmosphere, in which the annual average prices of polypropylene, acrylic acid and butyl acrylate were 0.87/1.1816300 yuan / ton respectively, with a year-on-year increase of 112% / 167% / 194% respectively; The average price difference of PDH, acrylic acid and butyl acrylate was 0.71/0.62/0.12 million yuan / ton respectively, with a year-on-year increase of 13% / 182% / 500% respectively.
The release of production capacity was promoted in an orderly manner, and the integration of light hydrocarbons helped the company’s profits to a new level Jiangsu Lianyungang Port Co.Ltd(601008) c2 phase II project is nearing completion and is expected to be completed in the middle of 2022. C3 industrial chain is expected to be further optimized, the project of green chemical new materials Industrial Park will be constructed in an orderly manner on schedule, and the production capacity of ethanolamine, vinyl amine, EAA, Poe, lithium battery materials and other new materials will be promoted rapidly, which is expected to become a new profit growth point in the future. The company has significant advantages in light alkylation of raw materials, and the by-product hydrogen will help the company build a green and low-carbon production demonstration base.
Investment suggestion: we are optimistic about the company’s raw material advantages and the space to build a new material industry chain around C2 and C3. It is estimated that the company’s operating revenue from 2022 to 2024 will be 42.4 billion yuan, 52.1 billion yuan and 59.9 billion yuan respectively, the net profit attributable to the parent company will be 7.96 billion yuan, 10.22 billion yuan and 12.38 billion yuan respectively, and the corresponding EPS will be 4.63, 5.94 and 7.20 yuan respectively. At present, the corresponding PE of the stock price is 9, 7 and 6 times respectively, maintaining the “buy” rating.
Risk tip: propylene demand is lower than expected, production expansion progress is lower than expected, and raw material prices fluctuate sharply
