\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 117 China National Chemical Engineering Co.Ltd(601117) )
Orders increased by 90% from January to March, and revenue continued to grow strongly. The company announced that the newly signed contract amount from January to March 2022 was 103.9 billion yuan, a significant increase of 90% year-on-year. On the basis of the high increase from January to February, the company further accelerated 2.5 PCTs, showing a strong growth trend. Among them, 99 billion yuan was contracted for construction projects, and 69.4/27/2.6 billion yuan was newly signed for chemical / Infrastructure / environmental treatment, accounting for 70% / 27% / 3% of the project contracts respectively. In non engineering contracts, survey and design / industrial and new material sales / modern services were newly signed with 1.3 billion yuan, 2.3 billion yuan and 1.1 billion yuan respectively. Geographically, the newly signed contracts in China amounted to 93 billion yuan, an increase of 86% at the same time; Overseas new contracts amounted to 10.9 billion yuan, a substantial increase of 135% year-on-year, and the overseas business environment continued to improve. In March, the newly signed contracts were 27.2 billion yuan, an increase of 97.6% over the same month, a slight increase of 0.3 PCT compared with February. Among them, the newly signed orders of chemical / infrastructure projects were 16.5/8 billion yuan respectively, accounting for 64% / 34% of the total engineering orders in a single month, with a month on month change of – 6.7 / + 5.5 PCT respectively. From January to March 2022, the company achieved a total operating revenue of 35.5 billion yuan, an increase of 41% at the same time, continuing the strong growth momentum since the beginning of the year; In March, the monthly revenue was 11.6 billion yuan, an increase of 16% at the same time.
Hexanediamine is produced smoothly, and the project is expected to maintain high profitability in the future. The company stepped up the production of industrial projects. On March 31, it announced that the hexanediamine device of Tianchen Qixiang nylon new material project was successfully started at one time, and the device successfully produced the first batch of qualified products, and the product quality reached high-grade products. We assume that 300000 tons of hexanediamine will be sold after the expiration of the project (excluding the profits of acrylonitrile and other products and the profits of hexanediamine nylon 66 link). According to our calculation, according to the current raw material price, the raw material cost per ton of hexanediamine of the company is about 13839 yuan / ton, and the selling price of hexanediamine corresponding to the breakeven point is 18000 yuan / ton (the current price is about 50000 yuan / ton), which has a large profit space. Assuming that the external sales price of hexanediamine is 30000 yuan / ton, the first phase of the project can achieve an operating income of 9 billion yuan, an after tax profit of 2.76 billion yuan, a net profit attributable to the parent of 2.07 billion yuan, and a net interest rate attributable to the parent of 23%, with strong profitability. Due to the fact that NVIDIA Shanghai’s new 400000 ton adiponitrile project is expected to be put into operation slower than the market expectation due to epidemic and other reasons, the current main adiponitrile production capacity in Europe is affected by the natural gas shortage caused by the situation in Russia and Ukraine, while the downstream nylon 66 polymerization production capacity in China is growing rapidly. Therefore, it is expected that the prices of the company’s adiponitrile and other products are expected to remain high this year, and the project profit is expected to exceed the expectation.
The objectives of the 14th five year plan are clear, and the stock repurchase incentive shows confidence. According to the official account number of the company, the group goal entered the world top five hundred in 14th Five-Year, and according to the 2021 world 500 strong threshold standard (income of about 240 billion yuan), the 14th Five-Year compound income target compound growth rate is 15% ( China National Chemical Engineering Co.Ltd(601117) listed companies account for 90% of group income), and the new material industry income accounts for 15% of the estimated revenue, with a scale of about 36 billion yuan. The proportion of new chemical materials industry will increase significantly in the future. Considering that it is significantly higher than the net interest rate of the project, it is expected to help the company’s performance growth exceed the revenue growth. Recently, the company announced that it plans to repurchase no more than 1% of its shares for equity incentive through centralized bidding transaction, and the repurchase amount is expected to be 400800 million yuan. The company’s share repurchase is used to stimulate the release of positive signals, which is expected to enhance the market value power, stimulate the vitality of employees and show confidence in future development.
Investment suggestion: we expect the company to realize a net profit attributable to the parent company of 4.2/64/8.2 billion yuan from 2021 to 2023, with a year-on-year increase of 15% / 54% / 27%, and EPS of 0.69/1.06/1.34 yuan respectively. The current share price corresponding to PE is 15 / 10 / 8 times respectively. The company has made solid progress in new material projects. The “14th five year plan” has made clear the determination of industrial development, accelerated the revaluation of the second growth curve and maintained the “buy” rating.
Risk warning: the production performance of industrial projects does not meet the expected risk, the risk of repeated epidemic, and the risk of overseas operation.
