Oriental Energy Co.Ltd(002221)
Annual report for 2021
April 2022
Letter to shareholders
Dear shareholders
First of all, on behalf of the company, please allow me to express my heartfelt thanks to all shareholders for their long-term support!
Oriental Energy Co.Ltd(002221) originated from the import, distribution and international trade of LPG (including propane and butane). Over the years, it has accumulated rich resources, channels and trading advantages, providing abundant propane and butane resources for the company to develop downstream manufacturing industry. However, due to the impact of geopolitics, financial policies and other sudden factors on international trade, there is great uncertainty. In order to stabilize the operation and gather strength to develop the manufacturing industry, the company has gradually stripped off the active trade business in the past two years, retained only some necessary adjustment trade, and made great efforts to give full play to the advantages of integrated operation.
Since 2011, the company has focused on propane dehydrogenation to propylene (PDH) project and transformed to manufacturing industry. PDH is to separate two hydrogen in propane (C3H8) through catalytic reaction to produce propylene (C3H6) and hydrogen. The annual energy consumption of a set of Shanghai Pudong Development Bank Co.Ltd(600000) tons of PDH is 215000 tons of standard coal and 25000 tons of by-product hydrogen, which is equivalent to 163000 tons of standard coal according to the energy efficiency ratio. The PDH of the company adopts electric drive technology, especially 70% of the power in Maoming comes from hydropower. In this sense, the hydrogen of the company belongs to “green hydrogen”. At present, the annual output of hydrogen is 75000 tons. After all the existing planned units are completed, it can produce 350000 tons of hydrogen, equivalent to 2.282 million tons of standard coal, equivalent to reducing 5 million tons of carbon dioxide. At that time, the company will become one of the largest by-product hydrogen suppliers in China, laying a solid foundation for the development of downstream hydrogen energy utilization industry, including the production of green aviation coal, synthetic ammonia and vehicle hydrogen energy with hydrogen.
Propylene is polymerized into polypropylene (PP). PP is the second largest general synthetic resin, accounting for about 30% of the total consumption of synthetic resin. It is considered to be the most potential variety among the five synthetic resins. The industry covers a wide range of industries and is widely used in automobile industry, household appliances, electronics, packaging, building materials and furniture. At present, the company has achieved propylene production capacity of 1.8 million tons / year and polypropylene production capacity of nearly 2 million tons / year; It is planned to add another 4 million tons of PP capacity in Maoming and other places in the next five years, ranking among the top in the world. The company has set up an innovative R & D team. Through continuous R & D investment, it has a number of independent intellectual property rights in high-end special materials such as fiber materials, transparent materials, pipe materials and vehicle materials. It is one of the few enterprises in China that can stably produce homopolymerization, copolymerization and random full brand polypropylene for a long time, and has become a pioneer, leader and cultivator in the industry. The company also pioneered the PP “industry + Internet” sales model in the world, realized all product online transactions, and created an international “polyolefin hall” e-commerce platform. Through online trading, smart logistics, digital warehouse, big data analysis and other means, realize the networking of the whole transaction process of production, logistics, consumption and supply chain finance.
The company’s next strategy is still to develop the synthesis and compounding of polymer materials around propane, butane, ethane and other resources, and realize the comprehensive utilization of hydrogen energy on this basis. We especially focus on two trillion industries:
First, polymer composite lightweight materials, such as PP and carbon brazing dimension composite, are the best automotive lightweight materials in the future. Therefore, the company cooperates with Guangzhou industrial control, gives full play to the existing advantages of Guangzhou industrial control in auto parts industry and urban rail transit industry, and invests in the construction of a 260000 T / a acrylonitrile unit, a Shanghai Pudong Development Bank Co.Ltd(600000) T / a ABS unit and supporting units in Maoming.
Second, cooperate with Honeywell to produce sustainable biological aviation coal (SAF) by using hydrogen and gutter oil. This is the only feasible emission reduction scheme for the aviation industry, which can reduce carbon emissions by about 83% compared with traditional fuels. Honeywell UOP’s ecofining aviation coal technology is the only technology certified by the European Union and has reached 100% trial standard. Using biomass raw materials and hydrogen to produce biological aviation coal is the best utilization path of hydrogen, which can greatly improve the utilization value of hydrogen. There is a huge space for the development of this industry in the future. The company first invested in the SAF project with a capacity of 1 million tons in Maoming, which will reduce greenhouse gas emissions by 2.4 million tons per year after completion.
According to the implementation plan of the 14th five year plan for the construction of Beibu Gulf Urban Agglomeration recently released by the state, Beibu Gulf is “the most growing urban agglomeration and coastal economic belt in China and even the world”. Maoming is also the first place of Beibu Gulf Urban Agglomeration, with comprehensive advantages such as port, land, industrial foundation, environmental capacity and policy environment. Therefore, the company decided to plant an industrial tree in Maoming (see the attached figure).
Shareholders, we firmly believe that under the call of the great rejuvenation strategy of the Chinese nation, with the care of governments at all levels, the understanding of all shareholders and the unremitting struggle of the company’s employees, we strive to become a greener, safer and more advanced world-class polymer material manufacturer; Become the mainstream supplier of green hydrogen energy in China; At the same time, with the full support of the governments of Guangdong Province and Maoming City, build a “zero carbon” industry demonstration base in Maoming.
Our vision is to be an international lighthouse enterprise, committed to shaping the future of human sustainable development!
Oriental Energy Co.Ltd(002221) Chairman: Zhou Yifeng
Section I important tips, contents and definitions
The board of directors, the board of supervisors and the directors, supervisors and senior managers of the company guarantee that the contents of the annual report are true, accurate and complete without false records, misleading statements or major omissions, and bear individual and joint legal liabilities.
Zhou Yifeng, the person in charge of the company, Fang Tao, the person in charge of accounting, and Dai Weishuang, the person in charge of the accounting organization (the person in charge of Accounting), declare that they guarantee the authenticity, accuracy and completeness of the financial report in this annual report.
All directors have attended the meeting of the board of directors to consider this report.
If there are forward-looking statements such as future plans in this annual report, the plan does not constitute the company’s substantive commitment to investors. Investors and relevant persons should maintain sufficient risk awareness and understand the differences between plans, forecasts and commitments.
1. Industry overcapacity risk
In view of the risk of overcapacity in the industry, our rational judgment believes that China’s PDH follow-up investment is serious, but many projects lack conditions. If there is no wharf, it is difficult to grow. From the demand side analysis, PP is transformed from net import to net export, and there is no surplus globally.
Oriental Energy Co.Ltd(002221) as the first enterprise to enter the PDH industry, after training, it has formed unique coping advantages: (1) raw material procurement is our traditional strength. In particular, under the FOB procurement mode, it locks in LPG resources in North America and the Middle East and greatly reduces the procurement cost of propane by means of ship cargo combination, inventory optimization and hedging. For example, in the fourth quarter of 2021, under the background of continuous high propane cost, the company’s raw material purchase price was about 5% lower than the market average level, about 300 yuan / ton or more; (2) The company will continue to give full play to the advantages of intensive operation. The large-scale expansion has not caused the same proportion increase of sales and operation costs. On the contrary, the unit cost has been continuously reduced; (3) In particular, it is worth mentioning that as the company’s layout in the downstream of hydrogen energy becomes more and more perfect, it is likely to become the pioneer of “dehydrogenation for hydrogen”; (4) Through our efforts in recent years, we have gradually opened up the international market. With the international “polyentang” e-commerce platform put into use, the export share is expected to continue to grow.
2. Technological innovation risk
The relevant projects of the company introduce international advanced technology and equipment, and there is a process of digestion and absorption. On the basis of mastering the existing imported technology, the company will cooperate with the technology supplier to further improve the technology, optimize the process and improve the efficiency, and strengthen the training of managers and technicians. The company will gradually expand its innovation ability and voice in technology and technology through independent research and development and joint research and development, and accelerate the localization process of technology and equipment.
3. Risk of sharp fluctuation of operating costs
The main raw material of LPG deep processing project of the company is imported LPG, and its price fluctuates frequently due to many factors such as international crude oil price, international market demand, climate change, regional conflict and even psychological expectation. If the company misjudges the trend of international liquefied gas price, resulting in high purchase price, it will increase the production cost of the company. The company will pay close attention to the changes in the international crude oil market, adjust its business strategy in time, and lock in risks through inventory management, hedging and other means.
In addition, the payment method of raw materials purchased by the company is mainly letter of credit. Under the general usance L / C settlement method, if the RMB depreciates before the L / C is due for payment, the company will form a certain scale of exchange rate loss. In this regard, the company will lock the exchange rate by signing agreements with banks and expand local currency settlement. At the same time, strengthen the management of the company’s foreign currency exposure, reduce the risk of foreign currency exposure, and improve the company’s financial management system.
The profit distribution plan approved by the board of directors is: take 1576127767 as the base, distribute cash dividend of 2.17 yuan (including tax) to all shareholders for every 10 shares, send bonus shares of 0 shares (including tax), and do not use the accumulation fund to increase the share capital.
catalogue
Section I important tips, contents and definitions Section 2 company profile and main financial indicators Section III Management Discussion and Analysis Section IV corporate governance Section V environmental and social responsibility 54 section VI important matters 59 Section VII changes in shares and shareholders Section VIII preferred shares 83 section IX relevant information of bonds 84 section x financial reporting eighty-eight
Directory of documents for future reference
(I) financial statements containing the signatures and seals of the person in charge of the company, the person in charge of accounting and the person in charge of accounting institutions. (II) the original of the audit report with the seal of the accounting firm and the signature and seal of the certified public accountant. (III) originals of all company documents and announcements publicly disclosed during the reporting period.
interpretation
Explanatory item refers to the explanatory content
The reporting period refers to the period from January 1, 2021 to December 31, 2021
The company, the company and Oriental Energy Co.Ltd(002221) refer to Oriental Energy Co.Ltd(002221)
Masson energy and related parties refer to Masson energy (Singapore) Co., Ltd
Donghua petroleum refers to Donghua Petroleum (Changjiang) Co., Ltd
Unocal Changjiang refers to Unocal Changjiang Co., Ltd
Zhangjiagang new materials refers to Oriental Energy Co.Ltd(002221) (Zhangjiagang) new materials Co., Ltd
Ningbo new material refers to Oriental Energy Co.Ltd(002221) (Ningbo) new material Co., Ltd
Donghua Singapore refers to Oriental Energy Co.Ltd(002221) (Singapore) International Trading Co., Ltd
Donghua Maoming refers to Oriental Energy Co.Ltd(002221) (Maoming) Co., Ltd
Euopi global oil process technology Co., Ltd., a leading supplier of Honeywell UOP in the field of oil and natural gas, whose process technology has laid the cornerstone of the development of most oil refining enterprises in the world, is subordinate to Honeywell characteristic materials and technology group, which develops process technology Automation solutions, characteristic materials and industrial software
C3 and C3 refer to hydrocarbon mixtures containing three carbon atoms
Hydrocarbon is a kind of organic compound. This compound is only composed of carbon and hydrogen. Hydrocarbon refers to that it contains alkanes, olefins, alkynes, cyclohydrocarbons and aromatics. It is the matrix of many other organic compounds
The carbon atoms in the molecule are connected by a single bond, and the other valence bonds are combined with hydrogen to form a compound alkane index, which is divided into cycloalkanes and alkanes
