\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Event: Ningxia Baofeng Energy Group Co.Ltd(600989) released the performance announcement for the first quarter of 2022. During the reporting period, the company achieved an operating revenue of 6.515 billion yuan, a year-on-year increase of + 30.83% and a month on month decrease of – 8.30%; It is calculated that the gross profit of the company in the first quarter was 2.539 billion yuan, with a gross profit margin of 38.97%, up 11 PCT month on month; In the first quarter, the net profit attributable to the parent company was 1.746 billion yuan, a year-on-year increase of + 1.07% and a month on month increase of – 0.34%.
Comments: in the first quarter, crude oil prices continued to push up, driving polyolefin prices upward, and coal prices fell month on month; It is estimated that the cost center of the oil head polyolefin production enterprise in the first quarter is about 8300 yuan / ton, and the polyolefin cost center of the company is about 5500 yuan / ton, with significant comparative advantage. Coke benefited from the company’s high level of self-sufficiency in raw materials and the continued prosperity of the industry, making steady contributions to the performance. According to the operating data of the company in the first quarter, the sales of polyethylene and polypropylene of the company were 181900 tons and 159800 tons respectively, and the production and sales rates were 99.22% and 94.65% respectively; The sales volume of coke sector was 1146700 tons, with a production and sales rate of 98.03%, an increase of 7.43 PCT year-on-year, contributing to the main performance. In the future, under the background of continuous high operation of crude oil and relative stabilization of coal price, the company’s competitive advantage is expected to further appear.
The 3 million ton coker co production project is expected to be put into operation within this year, and many projects are in hand. The company has entered the rapid expansion period: according to the company’s announcement, the main construction project of Ningdong 3 million ton / year coker co production project has been completed, four coke ovens have been ignited successively from October to November 2021, two have been put into operation, and the remaining two units are expected to be put into operation in May and gradually contribute to the performance increment. In addition, according to the announcement, the preparation of the company’s key project Wushenqi 4 million ton coal to olefin project (phase I 2.6 million tons / year) has been completed, and the construction can be started after the EIA approval. Considering that the Ministry of ecology and environment has begun to accept the EIA of other large-scale coal chemical projects recently, we think it has a relatively positive impact on the acceptance of the company’s projects. In the long run, the company may form a production capacity of 6.7 million tons of coal to olefins + 7 million tons of coke, with significant growth.
Extend the industrial landscape and promote the coordinated promotion of new materials and new energy: the company announced that the third phase of 1 million T / a coal to olefin and C2-C5 comprehensive utilization to olefin project (including 250000 t EVA) will be constructed and semi completed, and the coal to methanol project is expected to meet the conditions for commissioning by the end of 2022. At the same time, the national Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen storage and application demonstration project constructed by the company is expected to continue to expand output with an annual increase of 300 million standard cubic meters in the future. It is expected to reduce 5% of the total carbon emission of chemical plants every year and take the lead in realizing carbon neutralization in 20 years.
Investment suggestion: maintain the Buy-A investment rating. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 8.063 billion, 10.545 billion and 14.444 billion respectively..
Risk tips: liquidity risk, repeated epidemic risk, project under construction less than expected risk, safety and environment risk, product price fluctuation risk, etc.
