Satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) )
Rapid growth in performance: Satellite chemical released its annual report for 21 years. The company achieved a revenue of 28.56 billion yuan, a year-on-year increase of + 165.1%, and a net profit attributable to the parent company of 6.01 billion yuan, a year-on-year increase of + 261.6%. Among them, 2021q4 achieved a revenue of 8.54 billion yuan, a year-on-year increase of + 165.1%, a month on month increase of – 7.7%, and a net profit attributable to the parent company of 1.75 billion yuan, a year-on-year increase of 130.7% and a month on month increase of – 17.8%. The substantial growth of performance comes from the high prosperity of C3 and the production of C2 sector. C3: in 2021, the prices of acrylic acid and butyl acrylate were 14071 yuan / ton and 16412 yuan / ton respectively, with a year-on-year increase of + 53.4% and + 94.6% respectively, and the current high boom of acrylic acid and butyl acrylate continues. C2: phase I of the company’s Jiangsu Lianyungang Port Co.Ltd(601008) project was put into operation in May 2021. According to the data of Jiangsu Lianyungang Port Co.Ltd(601008) petrochemical, C2 sector contributed 7.79 billion yuan of revenue and 1.61 billion yuan of net profit in 2021.
Projects under construction guarantee growth: the company’s Jiangsu Lianyungang Port Co.Ltd(601008) phase II is expected to be put into trial production in the middle of 2022, and its products include 400000 T / a high-density polyethylene, 730000 T / a ethylene oxide and Shanghai Pudong Development Bank Co.Ltd(600000) T / a styrene. The 100000 t / a ethanolamine, 400000 T / a polystyrene and 150000 T / a battery grade carbonate projects in phase I of the supporting green new material industrial park project are expected to be put into trial production in 2022q3 and 2022q4. 800000 tons of PDH, 800000 tons of butyl octanol and 120000 tons of neopentyl glycol with an investment of about 10.2 billion yuan are expected to be completed by the end of 2023. The company’s growth in the next three years has been fully guaranteed.
Pay attention to the value of hydrogen: the national development and Reform Commission issued the medium and long term plan for the development of hydrogen energy industry (20212035) on March 23, which emphasizes that “in the areas where coking, chlor alkali, propane dehydrogenation and other industries gather, give priority to the use of industrial by-product hydrogen and encourage the nearby consumption.” The company has abundant industrial by-product hydrogen. In the long run, the company will build a capacity of 2.5 million tons of ethane cracking and 1.7 million tons of propane dehydrogenation, and theoretically have 240000 tons of by-product hydrogen. In addition to the hydrogenation filling station project cooperated with Liquid Air China, Jiangsu Jiahong new materials Co., Ltd., a subsidiary of the company, uses Jiangsu Lianyungang Port Co.Ltd(601008) by-product hydrogen to build 6 450000 T / a peroxide, 2 400000 T / a propylene oxide, 300000 t / a synthetic ammonia and 2 260000 T / a acrylonitrile projects, so as to realize high value-added utilization of industrial by-product hydrogen.
Profit forecast and investment suggestions
Combined with PDH, acrylic acid landscape and the company’s project progress, we adjusted the company’s EPS from 2022 to 2024 to 4.54, 6.33 and 6.99 yuan respectively (originally predicted to be 5.00, 6.36 and – yuan), compared with the company’s 22-year average PE of 11 times, and the corresponding target price was 49.94 yuan (original target price was 59.94 yuan), maintaining the purchase rating.
Risk tips
Decline in product demand; The price of raw materials has risen sharply; The progress of the new project is less than expected.
