\u3000\u3000 Shandong Shida Shenghua Chemical Group Company Limite(603026) (603026)
Key points
Event: the company issued the announcement on the advance increase of annual performance in 2021. It is expected to realize the net profit attributable to the parent company of RMB 1.170-1.250 billion during the reporting period, an increase of RMB 910-990 million over the same period of last year, a year-on-year increase of 350.36% - 381.15%; During the reporting period, it is estimated that the net profit deducted from non parent company is RMB 1.164-1.244 billion, an increase of RMB 911-991 million over the same period of last year, a year-on-year increase of 360.42% - 392.06%.
The high boom of new energy vehicles boosted the demand for battery materials in the upstream, and the rise in product prices helped to increase performance. The new energy vehicle industry is booming, power battery manufacturers have greatly expanded their production, boosting the demand for upstream materials of lithium batteries, and the price of battery grade solvent remains high. In 2021, the average prices of DMC, EMC, Dec, EC and PC, the main solvents of lithium-ion battery electrolyte, were RMB 1.27, 2.37, 2.27, 1.39 and 15 thousand yuan / ton respectively, with a year-on-year increase of 32%, 58%, 51%, 40% and 42% respectively; The average prices of DMC, EMC, Dec, EC and PC in Q4 single quarter were RMB 1.50, 2.83, 2.69, 1.8 and 15600 / ton respectively, with year-on-year changes of - 3%, + 40%, + 35%, + 34% and + 19% respectively, and month on month changes of + 23%, + 24%, + 12%, + 38% and - 3% respectively. Since Q4 in 2021, the company has continued to increase the layout of battery grade solvents. In December 2021, the company plans to invest in the construction of a 100000 t / a EMC project with a construction period of two years. At the same time, it plans to invest in the construction of a refined 40000 t / a EC project, which is expected to be put into operation in May 2022. In 2021, the sales volume and sales revenue of the company's carbonate series products increased significantly compared with the same period of the previous year, the profit level increased significantly year-on-year, and the performance continued to release. The company also continued to optimize the product structure and developed SS grade series products on the basis of s-grade carbonate series products, with an overall profitability at a high level.
The upstream raw materials of carbonate are basically self supplied, and the layout of the whole industrial chain highlights the competitive advantage. The company is one of the few companies with the layout of the whole industrial chain of battery grade solvents. Its carbonate series solvent products cover five mainstream varieties, and the main raw material propylene oxide in the upstream is basically self supplied. The company also increases the layout in the direction of electrolyte and power battery additives. When the supply and demand of propylene oxide industry tends to be in tight balance in 2021, while the company can ensure the stable supply of raw materials, the cost advantage of propylene oxide production of carbonate series products is further highlighted, and the cost is expected to continue to decline in the future. In addition, the company has also formed an integrated production system dominated by dimethyl carbonate series products, with upstream and downstream production links as raw materials. While reducing dependence on external raw materials, the company has improved its autonomy in production process, cost control, quality optimization and so on. At the same time, the company continues to strengthen the cost reduction and efficiency increase of production devices, truly realize the supporting of the whole industrial chain, and the industry competitiveness is expected to continue to improve.
Profit forecast, valuation and rating: due to the continuous upward price of the company's solvent products and based on the company's good cost control, the company's performance exceeded expectations. In addition, superimposed on the company's capacity expansion, the company's profitability will continue to increase. Therefore, we raised our profit forecast for the next three years. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 11.93 (up 20%) / 13.19 (up 15%) / 14.64 (up 12%) billion yuan respectively, maintaining the "buy" rating.
Risk warning: the new project is put into operation less than the expected risk, and the increase in global power battery demand is less than the expected risk.
