\u3000\u3 China Vanke Co.Ltd(000002) 493 Rongsheng Petro Chemical Co.Ltd(002493) )
Event: Rongsheng Petro Chemical Co.Ltd(002493) released the annual report of 2021. During the reporting period, the company achieved an operating revenue of 177024 billion yuan, a year-on-year increase of + 65.03%; The net profit attributable to the parent company was 12.824 billion yuan, a year-on-year increase of + 75.46%. In the fourth quarter, the company achieved a total operating revenue of 47.667 billion yuan, a year-on-year increase of + 60.77% and a month on month increase of + 6.07%; The net profit attributable to the parent company was 2.702 billion yuan, a year-on-year increase of + 63.09% and a month on month decrease of – 24.01%. The company plans to pay a cash dividend of 0.15 yuan per share (including tax), with a total amount of 1.515 billion yuan.
Comments: the company’s performance increased significantly in 2021, mainly due to the incremental contribution of Zhejiang Petrochemical. During the year, Zhejiang Petrochemical achieved an operating revenue of 117.5 billion yuan, a year-on-year increase of + 81%; The net profit was 22.3 billion yuan, a year-on-year increase of + 99%. At the same time, the prosperity of refining and chemical industry has driven the steady improvement of revenue quality. In 2021, the company’s gross profit margin was 26.51%, with a year-on-year increase of 6.8pct. The company’s performance in the fourth quarter fell month on month, mainly due to two reasons: 1) the rising cost of crude oil and other raw materials, and the decline in the price difference of some products due to the restriction of production at the demand side under the “double control” policy. 2) According to the announcement, Zhejiang Petrochemical phase II atmospheric and vacuum distillation and other utility units have been gradually put into operation on November 1, 2020, and the Ministry of Commerce issued the 12 million ton crude oil quota for Zhejiang Petrochemical phase II on October 25, 2021; To a certain extent, it has affected the operation level of phase II units. At present, the first batch of crude oil quotas issued by the Ministry of Commerce and Zhejiang Petrochemical obtained a quota of 20 million tons. According to the estimation of the company’s monthly processing capacity of 3.4 million tons, the issued quota can ensure the company’s normal production in 2022h1 (historically, the second batch of quotas will be issued in June). Later, with the gradual transformation of Zhejiang Petrochemical phase II into fixed assets, it is expected to further support the company’s performance.
Driven by volume, Zhejiang Petrochemical phase II increment is expected to form performance support: at present, the price of crude oil is high, the demand side is relatively low due to the repeated impact of the epidemic, and the price difference of some products has decreased significantly. According to wind data, in the first quarter, the cracking price difference of refined oil, PE price difference and PX price difference decreased by 11.24%, 33.15% and 37.10% month on month respectively, which put phased pressure on the performance of refining and chemical enterprises. However, Zhejiang Petrochemical phase II is expected to gradually turn into fixed assets within the year, or form a strong support for the performance. At the same time, in 2022, the Ministry of Commerce issued the first batch of refined oil export quotas, and the company obtained the export trade quota of 1.34 million tons, which has a comparative advantage in private refining.
Product territory continues to expand, focusing on the company’s growth attributes: according to the company’s annual report, Zhejiang Petrochemical phase II has been fully put into operation, with more fine chemicals downstream than phase I, including LDPE, HDPE, LLDPE, photovoltaic grade EVA, polycarbonate, butadiene and other high value-added chemicals. At the same time, the company’s announcement focuses on the research and development of new materials, α- Olefin project has been filed; The 20000 t / a hydrogenation catalyst cooperated with UOP will also be put into operation soon. PTA sector, the first and second line devices of Yisheng new materials and 50000 tons of food grade RPET were successfully put into operation within the year; Another 90000 tons of RPET capacity continued to advance. 70000 tons of high-end film in polyester sector is expected to be put into operation this year, and the 500000 tons of differentiated fiber project in Shengyuan phase II is continuously promoted. With the support of refining and chemical projects, the expansion of the company’s product territory and the continuous overweight of high value-added products are expected to further contribute positive earnings to the company.
Investment suggestion: maintain the Buy-A investment rating,. We expect the net profit of the company from 2022 to 2024 to be 15.743 billion yuan, 17.299 billion yuan and 20.267 billion yuan respectively.
Risk tips: repeated epidemics, economic downturn, raw material price fluctuation risk, raw material quota risk, product price fluctuation risk, project construction less than expected risk, etc.
