\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 346 Hengli Petrochemical Co.Ltd(600346) )
Event: on April 6, 2022, Hengli Petrochemical Co.Ltd(600346) released the annual report of 2021: the operating revenue reached 19.997 billion yuan, an increase of 29.94% year-on-year; The net profit attributable to the parent company was 15.531 billion yuan, a year-on-year increase of 15.37%; The weighted average return on net assets was 27.14%, down 1.56 percentage points year-on-year. The gross profit margin of sales was 15.38%, a year-on-year decrease of 3.16 percentage points; The net profit margin on sales was 7.85%, down 1.01 percentage points year-on-year. The net cash flow from operating activities was 18.67 billion yuan, a year-on-year decrease of 22.67%. Among them, Q4 achieved a revenue of 46.508.9 billion yuan in 2020, a year-on-year increase of – 5.16% and a month on month increase of – 0.87%; The net profit attributable to the parent company was 2.819 billion yuan, with a year-on-year increase of – 20.95% and a month on month increase of – 30.73%; The weighted average return on net assets was 5.06%, down 2.83 percentage points year-on-year and 2.74 percentage points month on month. The gross profit margin of sales was 14.21%, with a year-on-year increase of 1.11 percentage points and a month on month decrease of 2.59 percentage points; The net sales interest rate was 6.07%, down 1.24 percentage points year-on-year and 2.62 percentage points month on month.
Comments:
The price of main products increased, and the company’s performance continued to grow in 2021
In 2021, the company achieved a revenue of 19.997 billion yuan, an increase of 29.94% at the same time; The net profit attributable to the parent company was 15.531 billion yuan, an increase of 15.37%. The continuous growth of performance mainly benefited from the gradual recovery of China’s economic boom, which led to the recovery of the demand for chemicals, the increase of the price of PX and other chemicals, and the repair of profitability such as polyester filament. By sector, refining and chemical achieved a revenue of 104932 billion yuan, a year-on-year increase of + 16.82%; The sales volume reached 23.179 million tons, a year-on-year increase of – 7.60%; The average price reached 452702 yuan / ton, a year-on-year increase of + 26.43%. PTA achieved a revenue of 48.163 billion yuan, a year-on-year increase of + 63.56%; The sales volume reached 113979 tons, a year-on-year increase of + 23.97%; The average price reached 422561 yuan / ton, a year-on-year increase of + 31.93%. Polyester products achieved a revenue of 27.277 billion yuan, a year-on-year increase of + 55.69%; The sales volume reached 3133600 tons, a year-on-year increase of + 15.28%; The average price reached 870461 yuan / ton, a year-on-year increase of + 35.05%. In 2021q4, refining and chemical achieved a revenue of 18.973 billion yuan, a year-on-year increase of – 37.1% and a month on month increase of – 13.7%; The sales volume reached 301.09 million tons, with a year-on-year increase of – 70.1% and a month on month increase of – 36.8%; The average price reached 630148 yuan / ton, a year-on-year increase of + 110.4% and a month on month increase of + 36.5%. PTA achieved a revenue of 12.594 billion yuan, a year-on-year increase of + 45.2% and a month on month increase of + 1.4%; The sales volume reached 253.73 tons, with a year-on-year increase of – 19.3% and a month on month increase of – 8.5%; The average price reached 496363 yuan / ton, a year-on-year increase of + 79.9% and a month on month increase of + 10.8%. Polyester products achieved a revenue of 7.758 billion yuan, a year-on-year increase of + 49.3% and a month on month increase of + 4.8%; The sales volume reached 854500 tons, with a year-on-year increase of – 16.5% and a month on month increase of + 1.1%; The average price reached 907941 yuan / ton, a year-on-year increase of + 78.9% and a month on month increase of + 3.6%. In 2021, the gross profit margin of the company reached 15.38%, a year-on-year decrease of 3.16 percentage points; The net interest rate reached 7.85%, a year-on-year decrease of 1.01 percentage points, which was mainly affected by the rise in the price of upstream crude oil and coal. In 2021, the average purchase price of coal / crude oil, the company’s main upstream raw materials, was 849.0/3262.7 yuan / ton, a year-on-year increase of 67.5% / 50.6% respectively. In terms of period expenses, the company’s sales / management / financial expense ratio reached 0.15% / 1.52% / 2.48% respectively in 2021, with a year-on-year increase of + 0.03% / – 0.15% / – 0.82%. The period expenses were well controlled. In 2021, the net cash flow generated from the company’s operating activities reached 18.67 billion yuan, a year-on-year increase of – 22.67%, mainly due to the increase in cash paid by the company for purchasing goods and receiving labor services; Meanwhile, the company’s inventory at the end of the period reached 33.553 billion yuan, up + 70.40% from the end of the previous period, mainly due to the increase in raw material procurement.
Against the background of rising oil prices, the anti risk ability of the whole industrial chain is prominent
Hengli Petrochemical Co.Ltd(600346) as the leader of private refining in China, it has efficiently built four capacity clusters: 20 million T / a refining and chemical integration project, 5 million T / a modern coal chemical plant, 1.5 million T / a ethylene project and 11.6 million T / a PTA plant, and built a large chemical strategic support platform with deep integration of “oil and coal” with rich product matrix. In 2022, under the background of rising crude oil price, sharp fluctuation of coal price and changing downstream demand, the company can give full play to the advantages of leading technology and system coupling of refining, ethylene and supporting coal chemical plants, continuously optimize the operation of the plant, and flexibly adjust the product structure in combination with the fluctuation of raw materials and the trend of market demand, so as to achieve “oil is oil, olefin is olefin and aromatic is aromatic”, Under the turbulent and changeable industry environment, it can realize the balance of production and sales of various leading products, smooth operation and stable profitability, and maximize the benefits of the company’s product portfolio.
Accelerate the layout of new materials and new energy industries and create a second growth curve
Based on the continuous empowerment of its large chemical platform and the accumulation of new material development for many years, the company aims at the bottleneck and shortage of new material demand gap caused by the rapid development of Shanxi Guoxin Energy Corporation Limited(600617) , new consumption and hard science and technology, and speeds up the layout of new material and new energy industries. Among them, in the field of degradable materials, the company currently has a PBAT capacity of 33000 T / A, and a new 450000 T / a degradable plastic is expected to be put into operation in mid-2022. The upstream supporting capacity of 300000 t / a adipic acid is also expected to be put into operation in 2023. At the same time, according to the EIA information, the company will also build a Shanghai Pudong Development Bank Co.Ltd(600000) T / a BDO project. In the field of polyester film and functional plastics, the company currently has 385000 tons / year of functional film and 240000 tons / year of engineering plastics. Meanwhile, Kanghui new material has an annual output of 800000 tons. The functional polyester film / functional plastics project is under active construction. The main production capacity includes 100000 tons / year of high-end functional film, 100000 tons / year of special functional film, 150000 tons / year of modified PBT and 80000 tons / year of modified PBAT. The new production capacity is expected to be put into operation in 2023. In the field of lithium diaphragm, the company has introduced 12 production lines from Zhipu and Zhongke Hualian in Japan, with an annual production capacity of 1.6 billion square meters. It is expected to reach production successively since 2023, which will further broaden the layout of the company in the downstream new energy material market. At the same time, the company also plans to invest 19.988 billion yuan to build a 1.6 million T / a high-performance resin and new material project. The project products mainly include 231800 T / a bisphenol A, 131200 T / a isopropanol, 130000 T / a ethylene oxide, 260000 T / a PC, 200000 t / A carbonate series, 300000 t / a ABS, 75000 T / a GPPS, 75000 T / a hips, 160500 T / a ethanolamine, 72000 T / a PDO, 60000 T / a PTMEG, etc. Through the “top-down” layout of the downstream high-end chemical new material industry chain, the company will continue to improve its profitability, enhance growth certainty, gradually grow into a world-class platform R & D and manufacturing enterprise of new chemical materials, and create the company’s “second growth curve”.
Improve the filament differentiation rate and continue to strengthen the “high-end polyester” industrial chain
As a leading polyester filament enterprise in China, the company focuses on the development path of market differentiation, high-end technology and business integration, and continues to develop towards refinement and differentiation. During the reporting period, deli chemical fiber began to mass produce microfibers with monofilament size of 0.2 denier (d), with specification of 15d / 72F, which is one of the finest microfibers in mass production in China; In the field of industrial silk, Hengli Chemical fiber project with an annual output of 200000 tons of industrial fiber has been fully put into operation, and the products have been applied to high-end industrial special fields such as oil and gas exploitation and marine engineering for the first time in the industry. In terms of production capacity, the company currently has a production capacity of 2.43 million tons / year of civil polyester filament and 400000 tons / year of industrial filament. At the same time, the company actively expands its scale advantages and plans to invest 9 billion yuan to build a 1.5 million tons of green multi-functional textile new material project in Nantong, Jiangsu Province, mainly including 150000 tons / year of new elastic fiber, 150000 tons / year of environmental protection fiber, 300000 tons / year of cationic POY 300000 t / a full extinction POY and Shanghai Pudong Development Bank Co.Ltd(600000) T / a differentiated fiber (300000 t / a POY and 300000 t / a FDY); In addition, the new production capacity of 1.2 million T / a civil silk in Deli phase II and 1.4 million T / a industrial silk in Suzhou headquarters are also in the project planning stage. With the construction of the new project, it will effectively expand the production capacity and scale of the company’s polyester filament, further improve the differentiation rate and added value of the company’s chemical fiber products, strengthen the “high-end polyester” industrial chain and enhance the company’s market pricing voice.
Significant advantages of integrated supporting facilities, effectively reducing operating costs
The company has significant advantages in integration and public supporting. Among them, refining and chemical units, coal chemical units, ethylene units and PTA units are connected through pipelines, which saves a lot of intermediate costs and transportation costs. At the same time, Changxing Island base is fully equipped with the industry’s top 520mw high-power captive power plant (providing a large amount of low-cost power and steam at all levels for their own use), captive crude oil wharf (two 300000 ton levels), China’s largest refinery’s captive crude oil tank farm (capable of storing 6 million tons of crude oil) and other complete finished raw material wharf and tank farm storage and other public works, which greatly reduces the production and operation cost, With the business strategic layout, integrated capacity matching and top matching public supporting facilities of the world-class petrochemical industry development platform, the company has laid a solid raw material foundation and industrial supporting conditions for the company to continue to develop the downstream chemical new material business of aromatics and olefins with scale advantages and market potential.
R & D investment continued to increase, and the driving force of technology increased steadily
The company is committed to building an international R & D team and building a high-level scientific and technological R & D platform. In recent years, R & D investment has continued to increase. In 2021, the company’s R & D expenses reached 1.019 billion yuan, an increase of 23.42% at the same time; The number of R & D personnel reached 3220, accounting for 9.03% of the total number of the company. The company’s technological R & D strength and new product innovation ability are ahead of its peers. It can quickly respond to the latest changes in market consumption demand. It has independently developed and accumulated a series of differentiated and functional products and mastered a large number of production patents. At present, Hengli is the second enterprise in the world and the first enterprise in China that can produce 12 micron silicon coated release laminated lithium battery protective film online; The yield of MLCC exceeds that of MLCC in China, accounting for 65%; High purity tetrahydrofuran (THF) has participated in the innovative research and development of covid-19 specific drugs; The independently developed henglink industrial Internet platform was rated as a “demonstration project” by the Ministry of industry and information technology, and was strongly selected as a provincial industrial Internet platform in Liaoning Province. Driven by innovation, the company’s technological advantages have been continuously strengthened, forming a moat of industry competition that is difficult to replicate in the short term.
Carry out equity incentive and repurchase plans to demonstrate the company’s confidence in development
In order to build a community of interests between employees and shareholders, the company announced on March 4, 2022 that it would implement the sixth phase of employee stock ownership plan. This stock ownership plan covers a wide range and has a large fund-raising amount. The total number of employees participating in the subscription will reach 11000 and the total fund-raising will reach 7.38 billion yuan. At the same time, from the end of 2021 to the beginning of 2022, the company has successively launched the third and fourth phase of share repurchase plan. Among them, the third phase of repurchase plan has been implemented, and the repurchase amount of the company has reached 1 billion yuan, and the top plan has been completed; The total repurchase fund of the fourth phase repurchase plan is up to 1-1.5 billion yuan, which fully demonstrates the company’s confidence in future development.
Under the background of double carbon, the company actively promotes energy conservation and emission reduction
Since the dual carbon target was put forward, the company has made rapid response and achieved remarkable results. Hengli refinery has become the largest frequency converter refinery in China, with an annual frequency conversion power saving of 260 million kwh, equivalent to reducing the consumption of 80100 tons of standard coal / year; During the reporting period, Hengli refinery also saved 360000 tons of steam and about 41400 tons of standard coal by optimizing the operation of distillation tower. At the same time, the company plans to build a “roof power station” with an installed capacity of 100MW by using the idle roofs of warehouses and auxiliary workshops in Nantong Industrial Park. It is estimated that compared with thermal power, after all 100MW “roof power stations” are connected to the grid for power generation, it can save about 44000 tons of standard coal and reduce carbon dioxide emissions by about 109000 tons per year. Up to now, the total installed capacity in operation is about 60MW, At present, it has become the largest enterprise distributed photovoltaic power generation project in Jiangsu Province.
It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 18.788 billion yuan, 24.821 billion yuan and 29.805 billion yuan respectively, and the EPS will be 2.67, 3.53 and 4.23 yuan / share, corresponding to 8, 6 and 5 times of PE, maintaining the “buy” rating.
Risk tips: the implementation of policies, the construction progress of new production capacity is not up to expectations, the contribution performance of new production capacity is not up to expectations, the price of raw materials fluctuates, the change of environmental protection policies, the economy drops sharply, and the price of crude oil fluctuates sharply.
