\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 346 Hengli Petrochemical Co.Ltd(600346) )
Key points
Event:
On April 14, 2022, Hengli Petrochemical Co.Ltd(600346) , Hengli Chemical fiber, Dalian Thermal Power Co.Ltd(600719) and Thermoelectric Group signed the agreement of intent for major asset restructuring. The company plans to sell 100% equity of Kanghui Xincai directly and indirectly held by the company to Dalian Thermal Power Co.Ltd(600719) Dalian Thermal Power Co.Ltd(600719) Dalian Thermal Power Co.Ltd(600719) plans to purchase 100% shares of Kanghui new material jointly held by Hengli Petrochemical Co.Ltd(600346) and Hengli Chemical fiber by issuing shares.
Comments:
1. Kanghui new material, a wholly-owned subsidiary, plans to be split and listed. After the reorganization, Kanghui new material will still be consolidated in the main body of the company
As of April 14, 2022, the company holds 595124% shares of Kanghui new material, and Hengli Chemical fiber, a wholly-owned subsidiary of the company, holds 404858% shares of Kanghui new material. Therefore, the company actually holds 100% shares of Kanghui new material. The company plans to sell 100% equity of Kanghui new material directly and indirectly held by the company to Dalian Thermal Power Co.Ltd(600719) and Dalian Thermal Power Co.Ltd(600719) plans to purchase 100% equity of Kanghui new material jointly held by Hengli Petrochemical Co.Ltd(600346) and Hengli Chemical fiber by issuing shares. After the spin off, the ownership structure of the company will not change, Dalian Thermal Power Co.Ltd(600719) will become the controlling shareholder of Kanghui Xincai, Hengli Petrochemical Co.Ltd(600346) will become the controlling shareholder of Dalian Thermal Power Co.Ltd(600719) .
Overall, the completion of this restructuring will not cause the company to lose its controlling interest in Kanghui new material, the performance of Kanghui new material will still be consolidated in the main body of the company, and the company will still benefit from the thickening of the future performance of Kanghui new material. It will not have a material impact on the continuous operation of other business segments of the company, and will not damage the independent listing status and sustainable profitability of the company.
2. After the reorganization, Kanghui new material will focus on the field of new materials and have independent financing ability to ensure future development
Kanghui new material is the main development platform of listed companies' differentiated, high-performance green environmental protection films and new plastic materials and a national high-tech enterprise. After nearly a decade of process technology accumulation and rapid business development, Kanghui new materials has continuously improved its industry competitiveness in the field of medium and high-end functional films and new plastic materials, ranking among the first-class level in China. In 2021, Kanghui new material achieved a net profit of 1.086 billion yuan. By the end of 2021, Kanghui new material has an annual production capacity of 240000 tons of PBT engineering plastics in Yingkou base. It is the largest PBT manufacturer in China, mainly used in auto parts, polymer alloy, optical cable protective sleeve, electronics and electrical appliances and other industrial fields; With an annual production capacity of 385000 tons of BOPET functional film, it is applied to high value-added links such as optical equipment, release protection, electronics and appliances, vehicle decoration, construction field and packaging field of BOPET; It has the largest annual production capacity of 33000 tons of PBAT in China based on independent technology, which is applied to green environmental protection applications such as food grade shopping bags, tableware and straws of PBS / PBAT. In addition, the high smooth MLCC (chip multilayer ceramic capacitor) release base film independently developed by Kanghui new material has achieved mass production; The ultra smooth MLCC release base film process has been finalized, the sample certification of Japanese and Korean enterprises has been completed, and small batch production has been started; The ultra-high smooth MLCC release base film has passed the technical verification of Japanese and Korean enterprises and is being accelerated in order to quickly realize mass production. The 12 micron on-line silicon coated release film developed by Kanghui new material has successfully achieved mass production and export, becoming the only enterprise in China and the second enterprise in the world that can produce products of this thickness, with a monthly production capacity of more than 60 million square meters.
In the future, Kanghui new materials is building a project with an annual output of 800000 tons of functional polyester film and plastic, 450000 tons of degradable plastic, 1.6 billion square meters of lithium battery diaphragm, etc. 1) Functional polyester film and functional plastic project with an annual output of 800000 tons: the construction site is located in the ecological and green integrated development demonstration zone in the Yangtze River Delta of FenHu, Jiangsu Province, with a total investment of 11.12 billion yuan. The construction contents include 470000 tons of high-end functional polyester film, 100000 tons of special functional film, 50000 tons of modified PBT and 80000 tons of modified PBAT. The project produces products with differentiation and high added value that are in short supply in China to meet the needs of customers for medium and high-end polyester films and functional plastics. 2) The annual output of 450000 tons of PBS biodegradable plastics project: the construction site is located in Changxing Island, Dalian, with a total investment of 1.798 billion yuan. It mainly constructs the production capacity of 450000 tons of PBS / PBAT degradable new materials. 3) Lithium battery diaphragm project with an annual output of 1.6 billion square meters: Kanghui new materials has introduced 12 wet lithium battery diaphragm production lines from Japan Zhipu Machinery Co., Ltd. and Qingdao Zhongke Hualian new materials Co., Ltd., with an annual production capacity of 1.6 billion square meters. The construction has been started since January 2022, and the delivery is expected to be completed within 18 months.
After the spin off and reorganization of Kanghui new materials and its listing, the financing channels have been further widened to provide a solid capital foundation for the subsequent expansion and strengthening of Kanghui new materials, and can better focus on the professional operation and development in the field of functional films, PBT engineering plastics, PBS / PBAT biodegradable NEW materials and lithium diaphragm. Accelerate the breakthrough of Kanghui new materials in the bottleneck of China's scarce new chemical material products such as high-end functional films and biodegradable new materials, and enhance its development ability in core technology research and development and high-end capacity layout. After Kanghui new material has independent financing ability, the project construction and R & D investment funds are guaranteed, the future performance is expected to grow rapidly, and the consolidated statement profit of the company will be further thickened.
3. Kanghui new material's performance and valuation are expected to improve, and the company is expected to benefit for a long time
We believe that, on the one hand, Kanghui new material business is in its infancy. At present, Kanghui new material profit accounts for a small proportion of the company's overall profit, and the company's valuation is mainly based on major refining and chemical businesses. Therefore, the spin off and listing of Kanghui new material will not affect the company's existing valuation logic. On the other hand, Kanghui new material mainly focuses on the new material business with high added value. After splitting and listing, the market is expected to give a higher valuation, so as to fully reflect the value of Kanghui new material. After the spin off and listing of Kanghui new materials, it has independent financing ability to ensure future development, and its performance is expected to grow rapidly. In the future, with the rapid growth of Kanghui new material performance and the improvement of valuation level, the equity of Kanghui new material held by the company will change from non current assets to high-quality and high liquidity stock assets of listed companies, and the financial situation of listed companies will be healthier.
4. Consolidate the development of the whole industrial chain and look forward to the leading private refining industry with "undervalued value + high growth"
Relying on the large chemical platform of "refining + ethylene + coal" in the upstream, the synergy effect of the whole industrial chain model is significant. In Dalian Changxing Island Petrochemical Industrial Park, the company has completed 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 global monomer largest ethylene project and 5 sets of PTA plants with a total monomer of 11.6 million T / A. While continuing to strengthen the support of the upstream "big chemical" platform, the company accelerates the layout of high-end new materials in the downstream, making full use of the rich "chemical raw material warehouse" in the upstream of the company. At the same time, the output of raw material products integrated with "oil and coal" in the upstream will continue to enable high value-added products in the downstream.
Accelerate the transformation and layout of downstream new materials. At the current time point, it has the characteristics of "undervalued value + high growth". Under the background of "carbon neutralization", the company is currently in the stage of accelerating the extension to the downstream high value-added field. We believe that as the leader of private refining and chemical industry, the performance of its original business is expected to continue to shine. At the same time, the perfect layout of the downstream industrial chain will also bring observable performance increment and reduce performance volatility, and it will still have high growth in the future. From the perspective of valuation, as of April 14, 2022, the company's 22-year PE was only 10 times, and the valuation was at the bottom of history. We believe that at the current time point, the company has the characteristics of "undervalued value + high growth" and has high investment value.
5. Profit forecast, valuation and rating of the company
Considering that the current spin off has not been implemented and is only in the planning stage, we maintain the company's profit forecast for 22-24 years. It is estimated that the company's net profit from 2022 to 2024 will be 16.677 billion yuan / 18.160 billion yuan / 20.7 billion yuan respectively, and the corresponding EPS will be 2.37 yuan / 2.58 yuan / 2.94 yuan respectively, maintaining the "buy" rating.
6. Risk warning
The progress of new production capacity is less than expected, the global economic recovery is less than expected, the international crude oil price fluctuates, and the risk of restructuring failure.
