\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 426 Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) )
Event: the company released the 2021 annual report. During the reporting period, the operating revenue was 26.636 billion yuan, a year-on-year increase of 103.1%, and the net profit attributable to the parent company was 7.254 billion yuan, a year-on-year increase of 303.37%, which were 15.76/22.25/18.111642 billion yuan in a single quarter respectively. The company plans to pay a cash dividend of 8 yuan (including tax) for every 10 shares. At the same time, the company released the performance forecast of 2022q1. It is expected to realize the net profit attributable to the parent company of 2.25 ~ 2.45 billion yuan in the first quarter, a year-on-year increase of + 43 ~ 55%.
The volume and price of main products rose simultaneously, driving the performance to rise sharply. In terms of quantity, 160000 T / a refined adipic acid quality improvement project, 300000 t / a caprolactam project and 300000 t / a dimethyl carbonate project have been put into operation successively, contributing to the increment of production and sales. In terms of price, the average price of the company’s main products urea / acetic acid / adipic acid / DMF / isooctanol / ethylene glycol in 2021 was 2238 / 6561 / 1071 / 13219 / 14272 and 5243 yuan / ton respectively, with a year-on-year increase of + 32.1 / 146.4 / 57.1 / 111.5 / 95.1 / 35.6%. Although the prices of raw materials such as raw coal, benzene and propylene also increased, the increase range was less than that of products, so the price difference of each product was 1349 / 4770 / 2855 / 9247 / 687 / 102 yuan / ton respectively, with a year-on-year increase of + 30.9/200.7/25.7/149.4/331.6/110.0%. The rising volume and price of main products brought the best performance in history, with ROE (weighted) reaching 38.53%, gross profit margin reaching 35.49% and net profit margin reaching 27.23%, both of which were the highest levels in history.
Both toughness and elasticity. In 2020, the global epidemic spread, the price of crude oil plummeted, and the price of chemicals fell sharply. However, the company gave full play to the platform advantage and significant cost advantage of one head and multi line flexible production, maintained stable production and sales volume, controlled the decline of performance, and showed strong resilience at the low ebb of the cycle. In 2021, with the recovery of global economy and demand, oil prices and chemical products prices entered a rising cycle. The company’s profits quickly repaired and rose sharply, reflecting strong elasticity at the top of the cycle.
New projects ensure long-term growth. In 2021, the company’s fixed asset investment reached 3.672 billion yuan, a year-on-year increase of + 40.4%, in a period of rapid expansion of scale. The 200000 t / a nylon 6 chip project of Dezhou base is expected to be put into operation in 2022, and the nylon 66 high-end new material project, 120000 T / a PBAT degradable plastic project and high-end solvent project are expected to be put into operation in 2023. Phase I of Jingzhou base, including 1 million tons / year urea, 1 million tons / year acetic acid, 150000 tons / year methylamine and 150000 tons / year DMF, is expected to be completed and put into operation by the end of 2023. The projects have been completed and put into operation one after another, which will ensure the long-term growth of the company.
Investment suggestion: we expect the company’s net profit attributable to the parent company from 2022 to 2024 to be RMB 8.482/87.23/10.929 billion respectively, EPS to be RMB 4.02/4.13/5.17 respectively, and the corresponding PE to be 8 / 8 / 6 times respectively. Considering that the company is cyclical, but the cycle trough is resilient, the cycle height is flexible, and has growth at the same time, it maintains the “buy” rating.
Risk tip: the product price has fallen sharply, and the progress of new projects is less than expected.
