\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 989 Ningxia Baofeng Energy Group Co.Ltd(600989) )
Event:
On April 18, 2022, the company released the first quarterly report of 2022: the operating revenue of Q1 in 2022 was 6.515 billion yuan, a year-on-year increase of 30.83% and a month on month decrease of 8.29%; 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 decrease of 0.34%. The net cash flow from operating activities was 1.383 billion yuan, a year-on-year decrease of 17.53% and a month on month decrease of 28.82%. The gross profit margin was 38.97% (a year-on-year decrease of 12.44 percentage points and a month on month increase of 11.00 percentage points), and the net profit margin was 26.81% (a year-on-year decrease of 7.89 percentage points and a month on month increase of 2.14 percentage points).
Key investment points:
The price rise of main products promoted the year-on-year growth of the company’s revenue
In 2022, Q1 achieved an operating revenue of 6.515 billion yuan, a year-on-year increase of 30.83% and a month on month decrease of 8.29%; 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 decrease of 0.34%. The company’s revenue in the first quarter increased significantly year-on-year, mainly due to the rise in the price of the company’s main products. The sales volume of the company’s main product polyethylene was 181900 tons, a year-on-year decrease of 0.82%, and the average sales price was 767728 yuan / ton, a year-on-year increase of 8.44%; The sales volume of polypropylene was 159800 tons, with a year-on-year increase of 22.92%, and the average sales price was 748876 yuan / ton, with a year-on-year decrease of 0.34%; Coke sales volume was 1146700 tons, with a year-on-year increase of 11.56%, and the average sales price was 225811 yuan / ton, with a year-on-year increase of 31.54%. Affected by the epidemic in Q1 of 2022, the sales volume of the company’s main products decreased month on month, and the company’s revenue and profit decreased month on month. Among them, the sales volume of polyethylene, polypropylene and coke decreased by 11.16%, 16.32% and 4.59% respectively.
In 2022, the gross profit margin of Q1 company’s sales was 38.97%, a year-on-year decrease of 12.44 percentage points, mainly due to the sharp rise in the price of raw materials during the reporting period. In 2021q1, the average purchase price of raw coal, the company’s main raw material, was 677.99 yuan / ton, up 48.18% year-on-year; The average purchase unit price of clean coal was 164423 yuan / ton, a year-on-year increase of 128.34%; The average purchase unit price of thermal coal was 495.15 yuan / ton, up 60.26% year-on-year; The average purchase unit price of coal tar was 402318 yuan / ton, a year-on-year increase of 68.76%; The average purchase unit price of bulky was 513697 yuan / ton, up 69.56% year-on-year.
In 2022, the net cash flow from Q1’s operating activities was 1.383 billion yuan, a year-on-year decrease of 17.53%. Mainly due to the large year-on-year increase in the price of raw materials and the increase in cash paid for purchasing goods and receiving labor services. In Q1 2022, the cash paid by the company for purchasing goods and receiving labor services was 2.602 billion yuan, a year-on-year increase of 75.69%.
Pay close attention to the construction of key projects, and it is expected to continue to grow in the future
The company actively pays close attention to the construction of key projects to ensure that the projects are put into operation step by step Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen production energy storage and application demonstration project, the electrolytic water hydrogen production project was completed at the end of the first quarter of 2022, and Cecep Solar Energy Co.Ltd(000591) power generation is under construction. Continue to do a good job in the installation and engineering construction of the second batch of equipment of the electrolytic water hydrogen production project. The main works of the 3 million T / a coal coking polygeneration project have been completed, and the supporting closing works of the project have been accelerated. Four coke ovens were successively ignited and dried from October to November 2021, and put into operation as soon as possible on the premise of ensuring safety and environmental protection. The construction process and half of the 500000 T / a coal to olefin (including 250000 T / a EVA unit) and 500000 T / a C2-C5 comprehensive utilization to olefin project in Ningdong phase III, of which the coal to methanol project is planned to be ready for commissioning by the end of 2022.
The preliminary construction and preparation of Inner Mongolia 4 million T / a (phase I 2.6 million T / a) coal to olefin project have been completed, and the project approval has entered the final stage. The construction can be started after the EIA approval. Strive to complete the approval procedures of Ningdong phase IV coal to olefin project and start construction; Strive to build a 200000 t / a styrene project by the end of the year to achieve a new profit growth point.
The profitability of coal to olefins is expected to maintain under high oil prices
Since this year, the international crude oil price has been rising and remained high and volatile. As of April 18, 2022, the settlement price of WTI crude oil futures was US $111.70/barrel, forming a certain support for the price of olefins. In the past two years, China’s ethane and propane to olefin projects have been put into operation, while the growth of international ethane and propane production is limited, and the international prices of ethane and propane will also remain relatively high. China’s coal supply is relatively sufficient, the coal price has maintained a reasonable level for a long time, and coal to olefins will continue to maintain the comparative cost advantage of the industry.
Profit forecast and investment rating: it is estimated that the net profit attributable to the parent company in 2021, 2022 and 2023 will be RMB 7.966 billion, 11.257 billion and 14.690 billion respectively, corresponding to 14.80, 10.48 and 8.03 times of PE respectively, maintaining the “buy” rating.
Risk tip: the project approval and construction progress caused by the carbon neutralization policy do not meet the expectations, the product price goes down, the project is put into operation does not meet the expectations, the sales growth does not meet the expectations, the price of raw materials fluctuates sharply, the safety and environmental protection production of the factory, product quality accidents, etc.
