\u3000\u3 China Vanke Co.Ltd(000002) 221 Oriental Energy Co.Ltd(002221) )
Costs soared and performance declined, focusing on profit restoration and high growth. Maintain “buy” rating
The company issued an annual report, and achieved a revenue of 26.37 billion yuan in 2021, a year-on-year increase of – 9.3%; The net profit attributable to the parent company was 1.14 billion yuan, a year-on-year increase of – 5.8%; Among them, Q4 achieved a revenue of 4.92 billion yuan, a year-on-year increase of – 8.1%, and a net profit attributable to the parent company of 180 million yuan, a year-on-year increase of + 0.4%. The company’s PDH capacity continues to expand, its profitability is expected to improve and its leading position is consolidated. According to the production capacity layout and product price fluctuation, we adjusted the profit forecast. It is estimated that the net profit attributable to the parent company will be RMB 1.68 (- 5.5) / 2.38/2.84 billion from 2022 to 2024, with a year-on-year increase of 47.5% / 41.7% / 19.1%, and EPS of RMB 1.02/1.44/1.72 respectively, corresponding to the current share price PE of 8.0/5.6/4.7 times. The company extends the downstream of the industrial chain, arranges hydrogen energy, acrylonitrile and biological aviation coal, is optimistic about the transformation and growth potential, and maintains the “buy” rating.
Raw materials lead to a sharp rise in costs, increase in volume and decrease in cost, which can be effectively hedged
The cost of polypropylene increased more than the price: in 2021, the company’s polypropylene sales volume was 1.095 million tons, with a year-on-year increase of + 16.2%, the average price was 7814 yuan / ton, with a year-on-year increase of + 11.7%, the cost per ton was 6198 yuan, with a year-on-year increase of + 23.4%, and the gross profit per ton was 1609 yuan, with a year-on-year decrease of 18.1% (the absolute value decreased by 357 yuan). The rise of polypropylene volume and price hedged the cost rise. Scale advantage and effective cost reduction: in 2021, the average purchase price of propane of the company was 4291 yuan / ton, a year-on-year increase of + 47.1%, the proportion of raw material cost remained unchanged, the corresponding polypropylene cost was + 33%, and the actual cost of the company was + 23.4%. The company gave full play to the advantages of intensification and scale, and the unit cost was continuously reduced. At the same time, the company’s LPG trade has formed the advantage of raw material procurement. The purchase price of propane is about 5% lower than the market price. When the raw material price rises, the profit remains relatively stable.
PDH capacity continued to expand, and propylene propane price difference was repaired to improve profitability
Continuous expansion of PDH and PP capacity: the company currently has a PDH capacity of 1.8 million tons / year and a PP capacity of 1.6 million tons / year. Maoming phase I (I) is under construction with a PDH capacity of Shanghai Pudong Development Bank Co.Ltd(600000) tons / year and a PP capacity of 400000 tons / year. It is expected to be put into operation by the end of 2022. Maoming phase I (II) has a PDH capacity of Shanghai Pudong Development Bank Co.Ltd(600000) tons / year and a PP capacity of 400000 20000 tons / year. The EIA and energy assessment have been approved, and Maoming phase III and IV are under planning. The propylene propane price difference is expected to be repaired: in 2021, the average price of Q4 propane (East China) was 810 US dollars / ton, a year-on-year increase of + 66.9%, propylene (FOB in Korea) was 1008 US dollars / ton, a year-on-year increase of + 10.3%, and the propylene propane difference narrowed significantly by 89.1%. The high oil price supports the rise of propylene price. Compared with Q4 in 2021, the price difference between propylene and propane in Q1 in 2022 has been gradually repaired, and the profitability of the company is expected to be improved.
Further extension of PDH industrial chain contributes to new growth
Comprehensive utilization of hydrogen energy: at present, the by-product hydrogen of PDH reaches 75000 tons / year, and the profit is 210 million yuan in 2021. The company’s by-product hydrogen is realizing the comprehensive utilization of hydrogen sales, hydrogen filling, hydrogen energy vehicles and hydrogen containing chemicals. Acrylonitrile: arrange 200000 t / a synthetic ammonia, 260000 T / a acrylonitrile and Shanghai Pudong Development Bank Co.Ltd(600000) T / a ABS projects to build a propane propylene acrylonitrile polyacrylonitrile carbon fiber automobile lightweight new material industry chain. Biological aviation coal: introduce Honeywell UOP biological aviation coal technology and use kitchen waste oil and other waste oils as raw materials. It is proposed to build a 2 500000 T / a biological aviation coal project, which can reduce CO2 by 2.4 million tons per year, leading the carbon emission reduction of China’s aviation industry.
Risk warning: the price of raw materials fluctuates sharply, the international trade policy changes, and the project progress is less than expected
