\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Key investment points
Event: on April 18, the company released the first quarterly report of 2022: the operating revenue in the first quarter of 2022 was 6.515 billion yuan, a year-on-year increase of 30.83% and a month on month decrease of 8.3%; The net profit attributable to the parent company was 1.746 billion yuan, an increase of 1.07% year-on-year and a decrease of 0.3% month on month; The net profit deducted from non parent company was 1.886 billion yuan, with a year-on-year increase of 4.82% and a month on month decrease of 4.3%.
Comments:
High oil prices supported olefin prices, while coal prices fell and the price difference increased. In the fourth quarter of last year, due to the influence of dual control of energy consumption, the coal price rose sharply and squeezed the price difference of coal to olefins. In the first quarter, the coal price fell, the high oil price led to the rise of polyethylene price, and the profit of olefin sector was repaired. In terms of production and marketing, the company’s Q1 polyethylene and polypropylene output was 183300 tons and 168900 tons, with a year-on-year increase of + 1.48% and 40.27%, and a month on month increase of – 5.16% and – 4.94%; The sales volume was 181900 tons and 159800 tons, with a year-on-year increase of – 0.82%, + 22.92%, and a month-on-month increase of – 11.16%, – 16.32%. Under the product boom, the overall production and sales volume increased significantly year-on-year, and the month on month decrease was due to the Spring Festival holiday in the first quarter. In terms of price of polyethylene and olefin, the company’s price remained at a high level of + 77.0% and – 74.4% respectively, with the average price of polypropylene and olefin at a year-on-year level of – 74.0% and – 44.0% respectively. In terms of raw materials, according to wind, the average price of raw coal Q1 was 693 yuan / ton, up + 68.30% year-on-year and – 25.90% month on month. In terms of price difference, the price difference between Q1 polyethylene, polypropylene and raw coal was 5223 yuan / ton and 5035 yuan / ton respectively, with a year-on-year ratio of – 7.08%, – 16.87%, and a month on month ratio of + 18.78%, + 12.11%. The price difference entered the repair channel. On February 24, the national development and Reform Commission issued the notice on further improving the coal market price formation mechanism, which made it clear that the medium and long-term tax inclusive price of underground coal (q5500) in Qinhuangdao port is between 570 yuan / ton and 770 yuan / ton, which is narrower than the price range (550 yuan / ton – 850 yuan / ton) published in the work plan for signing and performing medium and long-term coal contracts in 2022 (Exposure Draft) at the end of December last year, The company is expected to further reduce the cost of raw coal extracted from abroad, support the olefin price under the high level of crude oil, gradually enter the peak demand in summer according to the Convention, and its profitability is expected to be further improved.
Coke prices remain high and capacity release is imminent. The company’s Q1 coke output was 1.1698 million tons, with a year-on-year increase of + 3.11% and a month on month increase of + 1.24; The sales volume was 1146700 tons, with a year-on-year increase of + 11.56% and a month on month increase of -4.59. The average price of Q1 was 2258 yuan / ton, with a year-on-year increase of + 31.54% and a month on month increase of + 0.5%. Due to the continuous liquidation of old production capacity, the overall supply of coke market is tight, and the coking coal price is high. Under the resonance between supply and demand and raw materials, the coke price remains high. The main project of the company’s 3 million T / a coking polygeneration project has been completed, and it is expected to gradually convert to fixed assets in the first half of the year to contribute to the capacity increment. At that time, the company’s total coke capacity will increase from 4 million T / A to 7 million t / A.
The leading coal chemical industry has entered the stage of accelerated growth. The 500000 T / a coal to olefin and 500000 T / a C2-C5 comprehensive utilization to olefin projects in Ningdong phase III have been steadily promoted, including 250000 T / a EVA unit. The methanol and olefin project is planned to be completed by the end of 2022, and the EVA unit will be completed and put into operation in 2023; The 500000 ton coal to olefin project of Ningdong phase IV is being publicized for environmental impact assessment. The 4 million T / a coal to olefin project in Inner Mongolia is a modern coal chemical project planned by the state and extended and supplemented by the autonomous region. It is a key demonstration project in the four modern coal chemical industry demonstration areas planned and arranged in the layout plan for innovative development of modern coal chemical industry issued by the national development and Reform Commission and the Ministry of industry and information technology during the 13th five year plan. At present, it has been approved by Inner Mongolia Eerduosi Resources Co.Ltd(600295) municipal government, It is agreed to use the olefin index in the overall plan of Inner Mongolia Eerduosi Resources Co.Ltd(600295) city to build a national modern coal chemical industry demonstration zone. At present, the company is accelerating the approval of environmental impact assessment.
Risk tips: price fluctuation of products and raw materials, project progress not meeting expectations, safety and environmental protection factors.
Profit forecast: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 8.079 billion yuan, 10.975 billion yuan and 21.399 billion yuan respectively, and EPS will be 1.10 yuan, 1.50 yuan and 2.92 yuan. Maintain buy rating.
