\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 028 China Petroleum & Chemical Corporation(600028) )
Key points
Event:
On March 27, 2022, the company released the annual report of 2021. In 2021, the company achieved an operating revenue of 2.74 trillion yuan, a year-on-year increase of + 30%; The net profit attributable to the parent company was 71.2 billion yuan, a year-on-year increase of + 114%. In the single quarter of 2021q4, the company achieved an operating revenue of 737.5 billion yuan, a year-on-year increase of + 34% and a month on month increase of – 0.6%; The net profit attributable to the parent company was RMB 11.3 billion, which was converted into eps0.5% 09 yuan / share, up + 15% year on year and – 45% month on month.
Comments:
The oil price rose, the upstream turned losses into profits, and the effect of stabilizing oil and increasing gas was remarkable: the company’s upstream segment had an operating profit of 4.7 billion yuan in 2021, mainly due to the upward shock of international oil price under the tight pattern of crude oil supply and demand throughout the year, and the upstream turned losses into profits. In 2021, the company’s crude oil price was USD 66.58/barrel, a year-on-year increase of + 60.76%; The rise in oil prices raised the company’s full cost per barrel of oil to US $63.98/barrel, a year-on-year increase of + 28%. Seizing the opportunity of rising oil prices, the company has integrated oil and gas exploration and development in key basins, continuously expanded the scale of benefit construction and production, made major breakthroughs in continental shale oil exploration, made remarkable progress in increasing storage and stabilizing oil and gas, and achieved a record high natural gas production. In 2021, the company’s crude oil output was 280 million barrels, a year-on-year increase of – 0.2%; Natural gas production was 1.20 trillion cubic feet, a year-on-year increase of + 11.9%. In the single quarter of 2021q4, the company produced 71.11 million barrels of crude oil, a year-on-year increase of + 2.2% and a month on month increase of + 0.9%; Natural gas production was 321.6 billion cubic feet, with a year-on-year increase of + 7.1% and a month on month increase of + 8.9%. In addition, the company signed LNG medium and long-term agreements to increase overseas natural gas supply;
Develop high-end and high-quality natural gas market, and the sales volume and market share of natural gas continue to rise.
The demand for refined oil recovered, the volume and price rose together, and the gross profit of oil refining increased greatly: the operating profit of the company’s oil refining sector in 2021 was 65.2 billion yuan, turning losses into profits year-on-year, of which the Q4 single quarter income was 11.7 billion yuan, mainly due to the steady recovery of market demand outside China and the rise of the same volume and price of major petroleum and petrochemical products. Under the high oil price environment, the company’s crude oil processing cost increased in 2021, and the annual average cost of processing raw oil was 3329 yuan / ton, a year-on-year increase of + 35.6%; The total cost of processing raw oil was 878.4 billion yuan, a year-on-year increase of + 45.5%. The company seized the favorable opportunity of market demand recovery, increased the unit load, optimized and adjusted the product structure, increased the inventory income of raw materials and finished products, and significantly increased the refining gross profit level to 532 yuan / ton, a year-on-year increase of + 292 yuan / ton. The company processed 255 million tons of crude oil in the whole year, producing 6521, 5985 and 21.15 million tons of steam, diesel and kerosene respectively, with a year-on-year increase of + 12.6%, – 5.3% and + 3.8% respectively, and the diesel steam ratio decreased by 0.17 to 0.92. In 2021q4, the company produced 16.14, 16.93 and 4.55 million tons of steam, diesel and kerosene respectively, with a year-on-year increase of + 4.5%, + 10.3% and – 17.4% respectively.
The industry boom was maintained, and the profit of the chemical sector grew steadily: the operating profit of the company’s chemical sector in 2021 was 11.1 billion yuan, a year-on-year increase of + 7.1%, mainly due to the steady recovery of product demand and the high price. Seizing the good opportunities of economic recovery and high product prices, the company optimized the raw materials, devices and product structure, and realized the steady growth of profits. The annual output of ethylene and synthetic resin was 13.38 million tons and 19 million tons respectively, with a year-on-year increase of + 11.0% and 9.4% respectively; In 2021q4, 3.63 million tons of ethylene and 5 million tons of synthetic resin were produced respectively, with a year-on-year increase of + 13.02%, + 8.70% and a month on month increase of + 10.3%, + 6.1% respectively.
The rising price of refined oil promoted the steady growth of sales profit: the operating profit of the company’s sales sector in 2021 was 21.2 billion yuan, a year-on-year increase of 1.81%, which was mainly due to the warmer demand of China’s oil market, the increase of refined oil sales and prices, and the realized prices of gasoline, diesel and kerosene were + 21.4%, + 21.1% and + 22.1% year-on-year respectively. The comprehensive competitive advantage of the company’s oil sales network is stable. In the whole year, the total economic sales volume of domestic refined oil is 171 million tons, and the direct and sub sales volume is + 4.03% to 57.01 million tons year-on-year. In terms of products, the company sold 9087, 78.56 and 21.29 million tons of gasoline, diesel and kerosene respectively in 2021, with a year-on-year increase of + 5.4%, + 1.4% and + 2.2% respectively, and the sales ratio of diesel to gasoline decreased by 0.03 to 0.86 year-on-year. In addition, the company accelerated the construction of comprehensive service stations, innovated the marketing mode, and the non oil business developed continuously and healthily. In the whole year, the non oil business revenue was 35.4 billion yuan, the net profit was 4.1 billion yuan, the total number of self operated gas stations reached 30725, with a year-on-year increase of 18, and the gas volume of a single station was 3720 tons, with a year-on-year increase of + 0.92%.
In response to the call of “increasing production and storage”, the capital expenditure continued to grow: in 2021, the company responded to the national call of “increasing production and storage”, paid attention to the quality and efficiency of investment, and continued to optimize the management of investment projects. The annual capital expenditure was 167.9 billion yuan, a year-on-year increase of + 24%, and the capital expenditure of upstream, oil refining, chemical industry and sales was 68.1 billion yuan, 22.5 billion yuan, 51.6 billion yuan and 21.9 billion yuan, a year-on-year increase of + 21%, – 9%, + 97% and – 14% respectively. In 2022, the company’s planned capital expenditure was 19.8 billion yuan, with a year-on-year increase of + 18%. The planned capital expenditure of the four sectors of upstream, oil refining, chemical industry and sales was 81.5 billion yuan, 20.4 billion yuan, 66.1 billion yuan and 23.5 billion yuan respectively, with a year-on-year increase of + 20%, – 9%, + 28% and + 7% respectively. The capital expenditure of the company’s upstream and chemical sectors has maintained a continuous growth rate of more than 20%, laying a solid foundation for the growth of the company’s product output and the improvement of profitability.
Lay out the new energy industry chain and accelerate the transformation to an integrated energy service provider: on December 1, 2001, China Petroleum & Chemical Corporation(600028) and Petrochina Company Limited(601857) signed a strategic cooperation framework agreement. The two sides jointly undertake the important task of national oil and gas security, and take the signing of the agreement as an opportunity to comprehensively deepen cooperation in oil and gas business, new energy, informatization and digitization. The signing of this agreement with hydrogen energy shows that the company is determined to accelerate the transformation from hydrogen energy to new energy fields, including hydrogen energy. The company accelerated its transformation to a comprehensive energy service provider of “oil, gas, hydrogen and electricity services”, and started the construction of China’s first 10000 ton photovoltaic green hydrogen demonstration project in Kuqa, Xinjiang. This project is the world’s largest photovoltaic green hydrogen production project, which can produce 20000 tons of green hydrogen per year after the project is put into operation; A number of refining and chemical hydrogen supply centers have been built with high quality, and 74 hydrogenation stations, more than 1000 charging and exchange stations and more than 1000 distributed photovoltaic power generation stations have been built. The company’s green and low-carbon transformation route is clear, and its development in the field of new energy can be expected in the future.
Profit forecast, valuation and rating: we maintain the company’s profit forecast for 20222023 and add a profit forecast for 2024. It is estimated that the company’s net profit attributable to the parent company in 22-24 years will be 73.4/754/77.8 billion yuan and EPS will be 0.61/0.62/0.64 yuan / share respectively. The company is the leader of China Petroleum & Chemical Corporation(600028) chemical industry. With the continuous increase of capital expenditure and the gradual increase of new energy layout, the company has broad growth prospects, so it maintains the “buy” rating of A-Shares and H shares.
Risk tip: downside risk of crude oil price and downside risk of refined oil and chemical products
