\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 028 China Petroleum & Chemical Corporation(600028) )
In 2021, the company’s net profit was 71.2 billion and its dividend was 56.9 billion, with a dividend yield of 11%
In 2021, the company realized a net profit attributable to the parent company of 71.2 billion, a significant increase of + 114% year-on-year, the best level in a decade. Weighted average return on net assets roe = 9.4%, year-on-year + 4.9pct. The basic earnings per share is 0.588 yuan. The proposed dividend is 56.9 billion yuan, corresponding to 0.47 yuan / share, with a dividend proportion of 80% and a dividend yield of 11%
Upstream exploration and development: benefiting from the rise in oil and gas prices, the operating income has become positive
The company’s oil and gas equivalent output in 2021 was 39.4 million tons, basically the same as that of the same period last year; The output of natural gas was 34 billion m3, a year-on-year increase of 12%. The substitution rate of domestic oil and gas reserves reached 154%. The increase of crude oil reserves mainly comes from the “correction of previous estimates”; The increase of natural gas reserves mainly comes from “expansion and new discovery”. Therefore, the company’s natural gas still has good production potential. In 2021, the company achieved an oil price of US $68 / barrel and a gas price of 1.6 yuan / m3, with a year-on-year increase of + 50% and + 19% respectively. The upstream cost increased year-on-year with the rise of oil price, with depreciation, depletion and amortization + 6.6 billion; Resource tax + 3.9 billion; Exploration expenditure + 2.7 billion yuan. The exploration and development sector achieved an operating income of 4.7 billion (2020: – 16.5 billion).
Refining, chemical and marketing: benefit from the recovery of the epidemic and the rise of oil price, and inventory income
The operating income of oil refining sector in 2021 was 65.3 billion, which became positive year-on-year; The operating income of the chemical sector was 11.1 billion, basically the same year-on-year. The total processing profit of refining and chemical sector was USD 6.4/barrel, a significant increase year-on-year. We judge that it is mainly due to the demand for refined oil driven by the recovery of the epidemic and the inventory income brought by the rise of crude oil price.
The operating income of the sales sector was 21.2 billion, which was basically the same year-on-year.
Capital expenditure: it is planned to reach 19.8 billion yuan in 2022, and the upstream increase is higher than expected
In 2022, the company’s planned capital expenditure was RMB 19.8 billion, a year-on-year increase of + 18%. Among them, exploration and development, oil refining, chemical industry and sales increased by + 20%, – 9%, + 28% and + 8% respectively year-on-year. The increase in upstream capital expenditure exceeded market expectations and was mainly used for the construction of crude oil production capacity such as Shunbei and Tahe, natural gas production capacity such as West Sichuan, Dongsheng and Zhongjiang, and storage and transportation facilities such as Longkou LNG.
Profit forecast and rating: considering the rise of oil price, the net profit of 2022 / 2023 was increased by 812 / 822 (formerly 73.5/75.5 billion), and the net profit forecast of 2024 was increased by 84.3 billion. The current stock price corresponds to pE6 / 6 / 6 times, maintaining the “buy” rating.
Risk warning: the risk of upstream loss caused by the sharp decline of oil price; The risk that the sharp rise in oil prices will affect the profitability of the refining and chemical sector; The deepening of sanctions affects the risk of purchasing Russian crude oil
