\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Q1 has a stable performance, improved main business profits and high growth. Maintain “buy” rating
The company released its first quarterly report. In 2022, Q1 achieved a revenue of 6.51 billion yuan, a year-on-year increase of + 30.8% and a month on month increase of – 8.3%; The net profit attributable to the parent company was 1.75 billion yuan, up + 1.1% year-on-year and – 0.3% month on month; The net profit deducted from non parent company was 1.89 billion yuan, with a year-on-year increase of + 4.8% and a month on month increase of + 4.3%, which was in line with expectations. According to the rhythm of capacity release, we maintain the profit forecast. It is estimated that the net profit attributable to the parent company will be RMB 8.05/109.0/18.24 billion from 2022 to 2024, with a year-on-year increase of 13.8% / 35.4% / 67.4%; EPS is 1.10/1.49/2.49 yuan, corresponding to 14.7/10.8/6.5 times of the current share price PE. Under the high oil price, olefin profits are expected to increase, new production capacity opens up growth space and maintains the “buy” rating.
Polyolefin production and sales increased, hedging costs rose, and coke profits rose steadily
Polyolefin: in 2022, the sales prices of Q1 polyethylene and polypropylene were 7677 yuan / ton and 7489 yuan / ton respectively, with a year-on-year increase of + 8.4% and – 0.3%. The purchase price of gasification raw coal was 678 yuan / ton, with a year-on-year increase of 48.2%, and the price difference decreased by 10.9% year-on-year. The output of polyolefin was 342000 tons, with a year-on-year increase of 9.0%. The profitability of polyolefin decreased slightly, but the increase of production and sales hedged the rise of gasification coal cost. Coke: in 2022, the sales price of Q1 coke was 2258 yuan / ton, and the purchase price of coking clean coal was 1644 yuan / ton, with a year-on-year increase of 31.5% and 128.3% respectively. Although the price of coking coal increased significantly year-on-year, the self-sufficiency rate of 60% of coking coal diluted the cost of purchased clean coal, and the comprehensive price difference increased by 3.3% year-on-year. At the same time, the coke sales increased by 11.6% year-on-year, and the coke profit increased steadily.
The fundamentals continue to improve, and the profitability of the main business is expected to improve
The high crude oil price supports the increase of olefin price: in 2022, the average price of Brent crude oil in Q1 was 97.9 US dollars / barrel, a year-on-year increase of 59.7%. Since the conflict between Russia and Ukraine, the average price has been 109.2 US dollars / barrel, an increase of 78.1% over Q1 in 2021. Under the high oil price, China’s olefins are priced by the oil head route. With the transmission of crude oil cost to olefins, the olefin price is expected to increase. China’s spot coal price is still subject to policy constraints. Compared with large refining and chemical enterprises, the company’s profit advantage of coal to olefin is expected to highlight. Good demand drives up coke prices: affected by the epidemic, the current real estate infrastructure has not improved, and steel sales are blocked. With the mitigation of the epidemic, the downstream operating rate is expected to increase. Under the expectation of “steady growth”, the demand for coke is improved, the price rise is expected to continue, and the profitability of coke is expected to be further improved.
New production capacity continues to advance, with high growth
Coking polygeneration project: the 3 million T / a coal coking polygeneration project is expected to be put into operation in May 2022. Phase III olefins: 500000 T / a coal to olefins and 500000 T / a C2-C5 comprehensive utilization to olefins. The front-end methanol is expected to be put into operation by the end of the year, and the back-end olefins and EVA are expected to be put into operation in the first half of 2023. Phase IV olefin: 500000 T / a coal to olefin project is expected to be approved and started in 2022. Inner Mongolia olefin project: the EIA of 4 million T / a coal to olefin project (phase I 2.6 million T / a) has entered the final stage. Green hydrogen project: the electrolytic water hydrogen production project with an annual output of 240 million standard cubic meters of green hydrogen and 120 million standard cubic meters of green oxygen has been put into operation. The company continues to plan to add 300 million standard cubic meters of green hydrogen every year to realize enterprise carbon neutralization through green hydrogen coupling coal chemical industry.
Risk tips: the risk of falling product prices, the risk of rising raw material prices, and the risk of new projects falling short of expectations
