\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Event: on April 19, the company released the first quarter report of 2022. The company achieved a revenue of 6.515 billion yuan, a year-on-year increase of 30.83%; The net profit attributable to shareholders of listed companies was 1.746 billion yuan, a year-on-year increase of 1.07%; The deduction of non net profit attributable to shareholders of listed companies was 1.886 billion yuan, a year-on-year increase of 4.82%.
The profit margin improved significantly month on month. In 2022q1, the company achieved a revenue of 6.515 billion yuan, a year-on-year increase of 30.83%; The net profit attributable to shareholders of listed companies was 1.746 billion yuan, a year-on-year increase of 1.07%; The deduction of non net profit attributable to shareholders of listed companies was 1.886 billion yuan, a year-on-year increase of 4.82%. In terms of profit margin, the comprehensive gross profit margin was 38.97%, up 11 PCT month on month, and the comprehensive net profit margin was 26.81%, up 2.14 PCT month on month. The overall improvement was obvious month on month.
Coke boom is rising, and the advantages of industrial chain integration are prominent. In the first quarter of 2022, the company’s coke sector achieved a revenue of 2.589 billion yuan, a year-on-year increase of 46.75%, and achieved a sales of 1.1467 million tons, a year-on-year increase of 11.56%; Driven by high coal prices, coking coal prices rose sharply, with an average price of 225811 yuan / ton in a single quarter, up 31.54% year-on-year. The olefin sector achieved a revenue of 3.417 billion yuan, of which the sales volume of polyethylene was 181900 tons, and the average price in a single quarter was 767728 yuan / ton, a year-on-year increase of 8.44%; Polypropylene achieved sales of 159800 tons, with an average price of 748876 yuan / ton in a single quarter, a slight decrease of 0.34% year-on-year. On the raw material side, the purchase price of gasification raw coal in the first quarter of 2022 was 677.99 yuan / ton, a year-on-year increase of 48.18%; The purchase price of coking clean coal was 164423 yuan / ton, a year-on-year increase of 128.34%; The purchase price of thermal coal was 495.15 yuan / ton, with a year-on-year increase of 60.26%; The purchase price of coal tar was 402318 yuan / ton, a year-on-year increase of 68.76%. It is not difficult to see that the overall increase of raw materials far exceeds the increase of product prices. The coke raw material end of the company was supported by the company’s own coal mines, which offset the impact of market price fluctuations. In the face of huge market changes, the company gave full play to the advantages of industrial chain integration, and the coke boom continued to rise in the first quarter, making a major contribution to the performance.
Under the multi pronged regulation and control policy of coal price, the profit space is expected to be repaired. On February 24, the national development and Reform Commission issued the notice on further improving the coal market price formation mechanism, which defined the reasonable range of coal price, that is, the reasonable range of annual long-term association coal price (including tax) of 5500 kcal thermal coal in QinGang is 570 ~ 770 yuan / ton. According to the calculation of the price center, we speculate that the new benchmark price of the annual long-term association may be 670 yuan / ton, which is 30 yuan lower than the benchmark price of the thermal coal long-term association (700 yuan / ton) published in the previous solicitation draft, and slightly narrowed compared with the range set in the early stage (550 ~ 850 yuan / ton). On April 18, the national development and Reform Commission made clear the identification standard of illegal acts of coal price bid up. We believe that with the multi pronged policy, the company’s raw material procurement cost is expected to be further reduced, and the repair of profit space is in sight.
Investment suggestion: Considering raw materials, we expect the company’s earnings per share to be 1.12, 1.48 and 1.95 yuan respectively from 2022 to 2024, corresponding to 14, 11 and 8 times of PE respectively, maintaining the “buy” rating.
Risk warning: downstream demand is less than expected, product price fluctuation risk, and the progress of production expansion project is less than expected.
