\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 309 Wanhua Chemical Group Co.Ltd(600309) )
Event:
On April 25, Wanhua Chemical Group Co.Ltd(600309) released the first quarterly report of 2022: in the first quarter of 2022, the company achieved an operating revenue of 41.784 billion yuan, an increase of 33.44% year-on-year and 9.33% month on month; The net profit attributable to shareholders of listed companies was 5.374 billion yuan, a year-on-year decrease of 18.84% and a month on month increase of 5.23%; The gross profit margin reached 20.55%, down 11.58 percentage points year-on-year and up 3.46 percentage points month on month; The net interest rate reached 13.22%, down 8.33 percentage points year-on-year and 0.27 percentage points month on month.
Key investment points:
The improvement of production and sales led to the rise of income, and Q1 performance met expectations
In 2022, Q1 company achieved a revenue of 41.784 billion yuan, a year-on-year increase of + 33.44% and a month on month increase of + 9.33%. The company’s revenue has achieved rapid growth on a month on month basis, mainly benefiting from the gradual release of the company’s new production capacity and the significant increase in production and sales. Among them, the MDI capacity of Yantai MDI company and Hungarian BC company completed technical transformation in February and October 2021 respectively, resulting in capacity increment; At the same time, the PO / SM unit of large ethylene phase I, 60000 T / a PBAT biodegradable material and 10000 t / a ternary cathode material in Meishan base were also successfully put into operation at the end of 2021, bringing new performance increment to the company in 2022.
In terms of net profit attributable to the parent company, the company realized a net profit attributable to the parent company of RMB 5.374 billion in Q1 of 2022, with a year-on-year increase of – 18.84% and a month on month increase of + 5.23%. The company’s net profit fell year-on-year, mainly due to the significant year-on-year increase in the energy costs of upstream raw materials and European companies. In Q1 2022, the average price of 5000 kcal coal reached 1104 yuan / ton, a year-on-year increase of + 70%; The average price of propane CP reached US $803 / ton, a year-on-year increase of + 35%. The rising price of raw materials caused the decline of profitability. In 2022, the gross profit margin of Q1 company reached 20.55%, down 11.58% year-on-year and up 3.46% month on month. Compared with Q4 in 2021, the company’s gross profit margin increased, mainly due to the adjustment of accounting standards in 2021 and the transfer of freight to operating costs. Therefore, the relevant offset was carried out in Q4 in 2021, resulting in a significant increase in operating costs and a decline in gross profit margin in that quarter. From the perspective of net interest rate, in Q1 2022, the company’s net interest rate reached 13.22%, down 0.27 percentage points month on month. Under the background of the increase of upstream raw material prices, the overall profitability was flat month on month.
In terms of business segments, in 2022, the sales volume of Q1 polyurethane segment reached 950000 tons (year-on-year + 2.8%, month on month – 3.4%), and the average price reached 164575 yuan / ton (year-on-year + 10.6%, month on month – 1.2%); The sales volume of petrochemical sector reached 3 million tons (year-on-year + 27.7%, month on month + 28.2%), and the average price reached 6265.6 yuan / ton (year-on-year + 22.1%, month on month – 21.7%); The sales volume of fine chemicals and new materials reached 210000 tons (YoY + 27.7%, Mom – 7.6%), and the average price reached 241284 yuan / ton (YoY + 31.6%, mom + 17.7%).
In terms of period expense ratio, the company’s sales / management / financial expense ratio in 2022 and Q1 was 0.61% / 2.94% / 1.10% respectively, with a year-on-year ratio of -2.33 / – 0.25 / + 0.17 PCT and a month on month ratio of + 6.15 / – 1.22 / – 0.08 PCT; Meanwhile, the net cash flow from Q1’s operating activities in 2022 reached 4.051 billion yuan, a year-on-year increase of 34.18%, mainly due to the increase in cash received from the sale of goods and the provision of labor services in the current period.
MDI price spread is under short-term pressure and is optimistic about the profit recovery after the epidemic
Affected by the rising price of raw materials and the sluggish operation of downstream factories under the background of the epidemic, the price difference of MDI is under pressure in the short term. In Q1 2022, the average price of aggregate MDI reached 2031111 yuan / ton, with a year-on-year increase of – 4.91% and a month on month increase of – 0.11%; The price difference of polymerized MDI coal / pure benzene reached 1389824 yuan / ton, with a year-on-year increase of – 17.00% and a month on month increase of + 2.03%. As of April 24, the average price of Q2 polymerized MDI in 2022 reached 1873333 yuan / ton, a month on month increase of – 7.77%; The price difference of polymerized MDI coal / pure benzene reached 1198015 yuan / ton, with a month on month ratio of – 13.80%. In April, MDI prices fell month on month, mainly due to the impact of the epidemic, the blocked start-up of downstream small and medium-sized manufacturers led to a decline in demand, and the limited logistics had an adverse impact on cargo transportation. With the gradual control of the epidemic, the recovery of logistics and transportation, and the resumption of work and production of downstream manufacturers, the downstream demand is expected to gradually pick up. We are optimistic about the rapid repair of MDI profitability after the epidemic.
Realize multi field layout and accelerate the expansion of new material business
Fine chemicals and new materials business is another important industrial cluster of Wanhua after polyurethane and petrochemical business. It is the key direction of the company’s future development and has achieved continuous breakthroughs in recent years. In Q1 2022, the business of fine chemicals and new materials achieved a revenue of 5.067 billion yuan, a year-on-year increase of + 67.96% and a month on month increase of + 8.72%. At present, the company’s new materials have covered ADI, waterborne resin, PC, TPU, special amine, sap and other products. In 2021, the role of ADI business has changed from follower to leader; The sales volume of water-based resin business of emerging technology division increased significantly, and the battery material business continued to promote; The competitiveness of PC products of the high-performance polymer Division has been further improved, and the operating rate of PC devices is at the leading level in China. At the same time, the company actively promotes the construction of new projects. The main products put into operation in the next 2-3 years will focus on polyolefin modification, PC modification, battery materials, nylon 12, citral, degradable plastics and other fields. At the same time, the company plans to join hands with Baowu carbon industry to set up a new joint venture Zhejiang Baowan Carbon Fiber Co., Ltd. in Zhejiang to layout the polyacrylonitrile (Pan) based carbon fiber market and further expand its territory in the field of new materials.
The construction of new projects continued to advance, and the company entered a period of rapid expansion
Wanhua Chemical Group Co.Ltd(600309) continues to accelerate, the project construction continues to advance, and the industrial production operates stably. On April 8, the company announced that it plans to invest 23.1 billion yuan in Wanhua Chemical Group Co.Ltd(600309) Penglai Industrial Park to build high-performance new material integration and supporting projects. By the end of the first quarter of 2022, the construction in progress of the company had reached 29.931 billion yuan, accounting for 44.06% of the fixed assets. Recently, in addition to Penglai Industrial Park, Wanhua Chemical Group Co.Ltd(600309) (Ningxia) Co., Ltd. was established on March 10. The public participation information formula of the social stability risk analysis report of polyurethane industrial chain integration ethylene phase II project, and the commencement ceremony of Wanhua Fujian 1.08 million tons Aniline Project was held. With the continuous implementation and promotion of new projects, Wanhua Chemical Group Co.Ltd(600309) will enter a rapid expansion period again.
Considering the historical profitability of the company and the impact of the epidemic, we adjusted the profit forecast. It is estimated that the net profit attributable to the parent company in 20222024 will be RMB 25.008 billion, RMB 31.034 billion and RMB 37.653 billion respectively, corresponding to PE 9.5, 7.6 and 6.3 respectively, maintaining the “buy” rating
Risk warning: economic downturn; The project construction is not as expected; The market fluctuates greatly; New products are not as expected; Environmental protection and safety production; Intensified competition in the same industry; Product prices fell sharply; The price of raw materials has risen sharply.
