\u3000\u3 Shengda Resources Co.Ltd(000603) 225 Xinfengming Group Co.Ltd(603225) )
Key investment points
Event: on April 14, the company released the annual report of 2021: in 2021, the operating revenue was 44.77 billion yuan, a year-on-year increase of 21.05%, the net profit attributable to the parent company was 2.254 billion yuan, a year-on-year increase of 273.77%, and the net profit deducted from non attributable to the parent company was 2.17 billion yuan, a year-on-year increase of 445.04%. 2021q4 achieved an operating revenue of 8.201 billion yuan, a year-on-year decrease of 41.11%, a month on month decrease of 36.37%, a net profit attributable to the parent company of 320 million yuan, a year-on-year decrease of 6.9%, a month on month decrease of 47.65%, and a deduction of non attributable net profit of 315 million yuan, a year-on-year decrease of 1.5% and a month on month decrease of 43.53%.
Comments:
The annual performance hit a record high, and Q4 fell quarter on quarter. In 2021, the company realized a net profit attributable to the parent company of 2.254 billion yuan, a year-on-year increase of 273.77%,; In Q4, the net profit attributable to the parent company was 320 million yuan in a single quarter, a year-on-year decrease of 6.9% and a month on month decrease of 47.65%. In terms of profitability, in 2021, the gross profit margin was 10.51%, a year-on-year increase of 4.96 PCT, the net profit margin was 5.03%, a year-on-year increase of 1.63 PCT, and the roe was 16.08%, a year-on-year increase of 5.09 PCT; In 2021q4, the single quarter gross profit margin was 10.79%, with a year-on-year increase of 4.99pct and a month on month increase of 0.88pct; The net interest rate was 3.9%, with a year-on-year increase of 1.43 PCT and a month on month decrease of 0.84 PCT; Roe was 1.97%, down 0.93 PCT year-on-year and 2.15 PCT month on month. In the fourth quarter, due to the dual control of energy consumption and repeated epidemics, the profitability, production and sales of production capacity have been affected to varying degrees; However, benefiting from the release of the company’s filament production capacity and the continuous optimization of the industry pattern, the profitability of the whole year increased significantly year-on-year. In terms of period expenses, the total period expense rate of 2021 company was 4.55%, with a year-on-year increase of 0.75pct. Among them, the sales expense rate was 0.16%, a year-on-year decrease of 0.02pct, the management expense (including R & D expenses, comparable caliber) rate was 3.22%, a year-on-year increase of 0.58pct, and the financial expense rate was 1.16%, a year-on-year increase of 0.18pct. The company vigorously promotes 5G intelligent management. “Internet plus” helps to create first-class information production in the industry. The level of refinement is continuously improving, and the cost control capability is continuously strengthened.
In 2021, the simultaneous rise of volume and price drives the performance, and the current demand is under pressure, waiting for recovery. In terms of price, according to ccfei data, the average prices of PTA, polyester filament POY, DTY and FDY in 2021 were 4697 yuan / ton, 7421 yuan / ton, 8971 yuan / ton and 7617 yuan / ton respectively, with a year-on-year increase of + 29.6%, + 32.8%, + 23.4% and + 25.9%%; In terms of price difference, the average price difference between POY / DTY / FDY and PTA and ethylene glycol in 2021 was 1463 yuan / ton, 2834 yuan / ton and 1636 yuan / ton respectively, with a year-on-year increase of + 37.6%, + 11.2% and + 11.4%. Thanks to the normal recovery period of covid-19 epidemic, the overall prosperity of the industry has improved in the year. The total trading volume of downstream Zhejiang China Light & Textile Industrial City Group Co.Ltd(600790) grey fabric was about 2.94 billion meters, with a year-on-year increase of 20%. The rise in crude oil price during the year boosted the polyester industry chain, The price and price difference of the company’s products increased year-on-year; In terms of output, according to the company’s announcement, the company’s output of POY / DTY / FDY in 2021 was 4109 / 45.05 / 881900 tons respectively, with a year-on-year increase of + 20.61% / + 28.97% / + 9.95%, and the sales volume was 40485 / 43.43868400 tons respectively, with a year-on-year increase of + 19.35%% / + 27.29% / 8.97%. During the year, the company’s two sets of differentiated functional polyester filaments and one set of staple fiber projects were put into operation in April, July and November respectively, and the release of new production capacity continued to contribute to the increment. At present, the demand is under pressure and waiting for recovery: the epidemic situation in China in 2022q1 is repeated, the demand for textile and clothing is weakened, the increase of raw material cost price cannot be smoothly transmitted to the downstream, and the price difference of filament has narrowed. According to ccfei, the average prices of PTA, polyester filament POY, DTY and FDY in Q1 in 2022 are 5623 yuan / ton, 7978 yuan / ton, 9578 yuan / ton and 8321 yuan / ton respectively, with a month on month ratio of + 14.2%, + 1.4%, + 0.7% and + 3.1%; In Q1 of 2022, the average price difference between POY / DTY / FDY and PTA and ethylene glycol was 1272 yuan / ton, 2687 yuan / ton and 1575 yuan / ton respectively, with a month on month ratio of – 20.4%, – 11.9% and – 11.5%. According to the weekly data of ccfei on April 8, the operating rate of polyester filament was 87.8% (mom -0.80pct), and the inventory days of POY / DTY / FDY enterprises were 29 days (mom + 1 day) / 33 days (mom + 1 day) / 32 days (mom + 1 day); According to the industrial research, Taicang Shenjiu 200000 tons, Taicang huaru 250000 tons and other production capacity have been shut down for maintenance recently. The load of Shanghai Yuanfang has been reduced to 70% and the load of Huaxing staple fiber has been reduced to 50%. At present, enterprises take the initiative to shut down and reduce the load, which is expected to drive the industry into the warehouse removal stage. We are still optimistic about the elasticity of the filament industry after the improvement of the epidemic situation outside China.
The “two continents and two lakes” base has built “two ten million tons” and entered the stage of accelerated growth. The actual total PTA capacity of the company is 5 million tons; The total production capacity of polyester filament is 6 million tons, with a market share of nearly 12%, ranking among the top three in the industry; Successfully enter the staple fiber market, reach the production capacity of Shanghai Pudong Development Bank Co.Ltd(600000) tons, and open the second growth curve. During the year, the company will accelerate the release of production capacity: in 2022, the company will continue to steadily put in production capacity, and is expected to increase the production capacity of 1 million tons of polyester filament and Shanghai Pudong Development Bank Co.Ltd(600000) tons of polyester staple fiber. That is, by the end of 2022, the company will have the production capacity of 7 million tons of polyester filament and 1.2 million tons of polyester staple fiber. The growth period of two continents and two lakes: zhouquan base in Tongxiang and Donglin base in Huzhou are the core bases of polyester fiber production, with a total maximum production capacity of nearly 6 million tons; Pingshan Dushan base has a PTA production capacity of 5 million tons and adopts the latest generation process of BP company. In the PTA energy consumption index ranking in 2020 published by China Petroleum and Chemical Industry Federation, the energy and power consumption level ranks first in the industry, with obvious late development advantages. Relying on the upstream and extending downward, the company put into operation Shanghai Pudong Development Bank Co.Ltd(600000) tons and 300000 tons of differentiated polyester fiber in July 2021 and February 2022 respectively, which not only realizes the local transportation of raw materials and reduces logistics costs, Moreover, by taking advantage of waste heat power generation of PTA device, reverse power supply for self use greatly reduces the production cost, and the advantage of base is more obvious; The construction of Xuzhou Xinyi base was officially started in May 2021. Taking the thermal power project as the vanguard, it is planned to build a large-scale integrated industrial park such as filament, staple fiber, texturing, oiling agent, film, printing and dyeing, weaving and so on. The construction of the company’s four bases has been steadily promoted, the new production capacity has been released on schedule, the refinement level of public works and other series management has been continuously improved, and the cost control ability has been continuously strengthened. The company is constantly advancing towards the two “10 million tons” goals. It is expected that by 2025, the company’s PTA production capacity will exceed 10 million tons and polyester production capacity will exceed 10 million tons. The growth is worth looking forward to.
Risk warning: risk of large fluctuation of oil price and products; Risk of capacity release less than expected; The deterioration of the epidemic affects the demand risk.
Profit forecast: due to the sharp fluctuations in product prices and crude oil prices, we adjusted the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 2.466 billion yuan (originally 3.158 billion yuan), 3.774 billion yuan (originally 4.094 billion yuan) and 4.668 billion yuan (newly added), corresponding to 7.0/4.6/3.7 times of PE. Maintain the “buy” rating.
