\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 426 Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) )
Event: on March 29, 2022, Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) released the annual report for 2021: the operating revenue reached 26.636 billion yuan, an increase of 103.10% year-on-year; The net profit attributable to the shareholders of the listed company was 7.254 billion yuan, a year-on-year increase of 303.37%; The weighted average return on net assets was 38.53%, an increase of 26.42 percentage points year-on-year. The gross profit margin of sales was 35.49%, with a year-on-year increase of 14.12 percentage points; The net profit margin of sales was 27.23%, with a year-on-year increase of 13.52 percentage points. Among them, Q4 achieved a revenue of 8.401 billion yuan in 2021, with a year-on-year increase of 106.32% and a month on month increase of 26.86%; The net profit attributable to the parent company was 1.642 billion yuan, an increase of 223.40% year-on-year and a decrease of 9.30% month on month; The weighted average return on net assets was 7.67%, an increase of 4.33 percentage points year-on-year and a decrease of 1.53 percentage points month on month. The gross profit margin of sales was 26.54%, with a year-on-year increase of 5.94 percentage points and a month on month decrease of 9.95 percentage points; The net profit margin of sales was 19.55%, with a year-on-year increase of 7.08 percentage points and a month on month decrease of 7.79 percentage points. At the same time, on March 28, 2022, the company issued an announcement on the pre increase of performance in the first quarter. It is estimated that the net profit attributable to the parent company in the first quarter of 2022 will be 2.25-2.45 billion yuan, an increase of 43% – 55% year-on-year.
Comments:
The volume and price of main products have risen simultaneously, and the profitability of the company has been significantly enhanced. In 2021, the company’s performance has increased significantly, with an operating revenue of 26.636 billion yuan, a year-on-year increase of 103.10%; The net profit attributable to the shareholders of the listed company was 7.254 billion yuan, a year-on-year increase of 303.37%, and the revenue and net profit reached a record high. In 2021, the prosperity of China’s chemical industry was high, and the price of the company’s leading products increased significantly year-on-year. According to wind data, the average price of urea in 2021 was 2455 yuan / ton, with a year-on-year increase of 42.12%; The average price of DMF was 13177 yuan / ton, a year-on-year increase of 110.82%; The average price of acetic acid was 6607 yuan / ton, a year-on-year increase of 143.73%; The average price of adipic acid was 10823 yuan / ton, a year-on-year increase of 58.82%; The average price of ethylene glycol was 5245 yuan / ton, up 37.15% year-on-year; The average price of n-butanol was 12488 yuan / ton, up 96.73% year-on-year. In 2021, the company sold 2319900 tons of fertilizer, a year-on-year decrease of 7.54%, and achieved a revenue of 4.141 billion yuan, a year-on-year increase of 23.65%; The sales volume of organic amines was 572600 tons, with a year-on-year increase of 33.13%, and the revenue was 5.918 billion yuan, with a year-on-year increase of 142.38%; The sales volume of acetic acid and derivatives was 586800 tons, with a year-on-year increase of 0.53%, and the revenue was 3.463 billion yuan, with a year-on-year increase of 143.08%; The sales volume of new material related products was 1.3934 million tons, with a year-on-year increase of 32.18%, and the revenue was 11.556 billion yuan, with a year-on-year increase of 149.41%. The company’s chemical sector was fully prosperous.
The amide new material project was completed and put into operation, the ethylene glycol unit was successfully converted to DMC, and the product upgrading opened up room for growth
In October 2021, the company’s 300000 t / a caprolactam and supporting devices were completed and put into operation, and 200000 t nylon 6 chips and other production devices are under construction. It is expected to be put into operation in the first half of this year, and the company will form a complete cyclohexanone caprolactam polyamide 6 Industrial chain. Meanwhile, in October 2021, the series of technical transformation projects for increasing production and improving quality of dimethyl carbonate were successfully put into operation. The company’s original 500000 ton ethylene glycol production unit has the capacity to jointly produce 300000 tons / year of high-quality dimethyl carbonate. Benefiting from the high prosperity of products and the completion and operation of a series of technical transformation projects for increasing production and quality of dimethyl carbonate, caprolactam and supporting devices, the company expects to realize a net profit attributable to the parent company of RMB 2.25 billion-2.45 billion in the first quarter of 2022, with a year-on-year increase of 43% – 55%, which is expected to set a record of the highest profit in a single quarter. The company continues to upgrade its products and is expected to build a more perfect and high-end industrial chain in the future to open up room for growth.
Jingzhou, the second base, has been fully constructed, and the leading coal chemical industry has started low-cost capacity expansion
In July 2021, Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) (Jingzhou) Co., Ltd. syngas comprehensive utilization project / Park gas power platform project was officially started in Jiangling County, Jingzhou City, Hubei Province, and the Jingzhou base project entered the stage of comprehensive construction. Jingzhou base plans to build the park’s gas power platform project and synthetic gas comprehensive utilization project to form the production capacity of 1 million T / a urea, 1 million T / a acetic acid, 150000 T / A and dmf150000 T / a mixed methylamine. The construction of Jingzhou base has completely solved the space problem restricting the development of the company. In the future, through low-cost capacity expansion, the scale efficiency and leading advantage of the company will become more and more prominent.
Promote the construction of nylon 66, PBAT and other new material projects, and expand the production capacity advantages of DMC and other high-end solvents
In March 2022, the construction of the company’s new energy and new materials project was started. The company’s Nylon 66 high-end new material project plans to build 200000 t / a adipic acid production unit, 360000 T / a nitric acid unit, 42000 T / a hexanediamine unit and two 40000 t / a nylon 66 units. Among them, a 200000 t / a adipic acid production plant will be built in phase I. before the construction of phase II project, 200000 t / a adipic acid will be sold out. After the construction of phase II project, 52000 t adipic acid will be used for nylon 66 production, and the rest 148000 T will be sold out as products. The company’s high-end solvent project plans to build Shanghai Pudong Development Bank Co.Ltd(600000) T / a dimethyl carbonate (of which 300000 t is used to produce methyl ethyl carbonate), 300000 t / a methyl ethyl carbonate and 50000 T / a diethyl carbonate. With the continuous operation of Jingzhou base and new energy and new material projects, the company is expected to double its revenue in 2024.
Under the background of carbon neutralization, the advantageous production capacity is expected to be stronger and stronger
Under the background of carbon neutralization, coal chemical industry has aroused market concerns due to high carbon dioxide emissions. However, we believe that coal gasification is an important guarantee for China’s energy security and is still indispensable in the future. In the context of carbon neutrality, the government will increase the restrictions and clearing out of inefficient production capacity, which will benefit industry-leading enterprises Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) over the years, it has continuously invested in energy conservation and environmental protection, continuously reduced raw material consumption and energy consumption, and reduced emissions. All indicators are in the leading position in the industry. In the future, Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) is more expected to take advantage of this advantage to grasp the initiative of development and keep the strong.
Coal chemical route has obvious advantages under high oil price
International oil prices continued to rise from the end of December 2021. As of March 28, the settlement price of WTI crude oil futures was US $105.96/barrel, at an all-time high. Under the high oil price, the cost of petrochemical products increases and the profitability decreases. The coal price is stable under the control of China’s policies, the cost advantage of coal chemical enterprises is further highlighted, the product price has low downward space supported by high oil prices, and the company’s profit is expected to continue to rise
Investment advice and profit forecast
It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 8.242, 8.836 and 12.941 billion yuan respectively, and the EPS will be 3.90, 4.18 and 6.13 yuan / share, corresponding to 8.46, 7.89 and 5.39 times of PE, maintaining the “buy” rating.
Risk tips: macroeconomic risks; Raw material price and supply risk; The downstream demand is lower than the expected risk; Project construction risk; Safety production risk; exchange-rate risks; Product development and application risks.
