Satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) )
The company released its 2021 annual report, which achieved an operating revenue of 28.557 billion yuan, a year-on-year increase of 165.09%, and a net profit attributable to the parent company of 6.007 billion yuan, a year-on-year increase of 261.62%. The performance was in line with the pre increase announcement. Maintain buy rating.
Key points supporting rating
The sharp rise in product prices and the launch of new production capacity improved the company’s performance. In 2021, the company achieved an operating revenue of 28.557 billion yuan, a year-on-year increase of 165.09%, and a net profit attributable to the parent company of 6.007 billion yuan, a year-on-year increase of 261.62%. Among them, Q4 achieved a revenue of 8.539 billion yuan, a year-on-year increase of 165.10%, and a net profit attributable to the parent company of 1.751 billion yuan, a year-on-year increase of 130.71%. The bonus of 10.4 yuan per share increase (including cash tax) shall be distributed to all shareholders. The main reason for the accelerated growth of the company’s performance in 2021 is the sharp rise in product prices. According to Wande data, the annual average price of acrylic acid in 2021 was 1325726 yuan / ton, up 56.11% from the average price of 849234 yuan / ton last year; The average annual price of butyl acrylate in 2021 was 1784832 yuan / ton, up 82.83% from the average price of 976222 yuan / ton last year. The second is the launch of new production capacity. At the beginning of 2021, the company’s annual output of 180000 tons of acrylic acid and 300000 tons of acrylic acid projects were successfully put into operation. In May 2021, the Jiangsu Lianyungang Port Co.Ltd(601008) c2 phase I project was completed and put into operation, and the downstream supporting 250000 tons / year polyether monomer was also completed and put into the market in October, contributing a large performance increment to the company. The company achieved a gross profit margin of 31.72% in 2021, with a year-on-year increase of 3.02pp; The net interest rate was 21.06%, with a year-on-year increase of 5.67pp.
The production capacity of C2 and C3 products continues to increase, and the layout of new material products is accelerating. The second phase of C2 project is expected to be put into trial production in the middle of 2022. The first phase of the supporting green new material industrial park project, including 100000 t / a ethanolamine, 400000 T / a polystyrene and 150000 T / a battery grade carbonate (60000 T / a DMC, 50000 T / A EC and 40000 t / a Dec / EMC), has started construction and is expected to be completed in the second half of 2022. The C3 industrial chain of the company also continues to promote the construction of production capacity. The technical transformation project with an annual output of 360000 tons of acrylic acid and 720000 tons of ester, the project with an annual output of 350000 tons of polypropylene and 250000 tons of hydrogen peroxide (including 20000 tons of electronic grade) are all in orderly progress. The construction progress of the new material and new energy integration project will be accelerated and is expected to be completed by the end of 2023. The company is accelerating the layout of new material industry. The project of green chemical new material industrial park with a total investment of about 15 billion has been officially started in March. The construction contents mainly include 200000 t / a ethanolamine, 800000 T / a polystyrene and 100000 t / A α- Olefin and supporting Poe, 750000 T / a carbonate series production units and related supporting projects. The company cooperates with industry university research platforms such as Zhejiang University and East China University of technology to accelerate the synthesis of long chain by ethylene oligomerization α- Pilot scale test of olefin and Poe technology development project.
Valuation
The company’s C2 and C3 dual industrial chains go hand in hand, with rich reserves of new production capacity in the future, and new material products are expected to further enhance the company’s development space. Due to the large price increase and the smooth progress of the project, the EPS of the company is expected to be 4.78 yuan, 5.92 yuan and 7.24 yuan from 2022 to 2024, and the corresponding PE is 8.7, 7.1 and 5.8 times respectively. Maintain buy rating.
Main risks of rating
Exchange rate fluctuations affect the company’s exchange gains and losses; Abnormal fluctuations in oil prices and raw material prices affect the company’s product prices and gross profit; The construction progress of the project is lower than expected; Safety and environmental protection risks, etc.
