\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 309 Wanhua Chemical Group Co.Ltd(600309) )
Performance
On April 25, the company released its first quarterly report, realizing an operating revenue of 41.784 billion yuan, a year-on-year increase of 33.44%, and a net profit attributable to the parent company of 5.374 billion yuan, a year-on-year decrease of 18.84%.
Analysis
In the first quarter, the price difference of polyurethane narrowed year-on-year, driving the overall gross profit margin down. In the first quarter, the overall operation of the company remained basically stable, and the ring ratio of performance improved slightly. In the first quarter, the production and sales volume of the company’s core product polyurethane reached 950000 tons (year-on-year + 2.8%, month on month – 3.5%). In the first quarter, the operation prosperity of polyurethane decreased. On the one hand, the price of raw materials such as benzene increased greatly due to the increase of crude oil price, on the other hand, the demand segment was relatively weak due to the impact of Winter Olympics, epidemic and other factors, and the overall shipment volume of the company remained relatively stable, However, the product price difference narrowed significantly (the price of raw material pure benzene was + 42.83% year-on-year, and the product aggregate MDI price was – 21% year-on-year). Therefore, as the main product contributing to the company’s performance, the overall gross profit margin of the company in the first quarter decreased by more than 10 points year-on-year. Compared with the fourth quarter of last year, the price difference of the company’s MDI was slightly enlarged, and the gross profit margin of the company’s products also increased slightly.
The energy industry is under pressure, and the relative price of the petrochemical company is greatly reflected. Affected by the international situation and insufficient energy supply in the first quarter, the energy price increased significantly. Since the first quarter, the predicted CP contract prices of propane and butane have increased by 30% and 37% month on month. However, due to the relatively weak terminal demand, the price transmission capacity of chemical products is relatively poor, and the product price difference in the petrochemical industry has narrowed. At this time, the raw material storage advantage of the company’s cavern will appear, On the one hand, it smoothes the sharp fluctuation of raw material prices through inventory; On the other hand, in the first quarter, the company’s gas trade volume also increased month on month, realizing part of the profit.
The superposition of multiple factors in the short term affects the product profit, and there is still room for sustainable development in the long term. In the short term, the demand and cost pressure caused by the epidemic and the increase of raw material prices are relatively large, and the profits of the company’s main products are relatively under pressure. However, the company’s cost control and industrial chain advantages make the company’s cost buffer capacity relatively stronger, and the company still continues to optimize its costs and improve its ability to resist risks; At the same time, the company’s continuous R & D investment will successively enter the production capacity launch stage in the next few years. In 2021, 53 projects are under construction in Wanhua project, including 23 projects of CCCC. The company’s fine chemical businesses such as essence, high-temperature nylon, new energy materials and bio based materials are also expected to gradually grow.
Investment advice
The short-term performance is affected by the cost and demand, and there is still room for sustained growth in the long term. It is predicted that the net profit attributable to the parent company from 2022 to 2024 will be 24.1 billion yuan, 26.6 billion yuan and 28 billion yuan respectively, and the EPS will be 770 million yuan, 830 million yuan and 890 million yuan respectively. At this stage, the corresponding PE is 9.9 times, maintaining the buy rating.
Risk tips
The risk of sharp fluctuations in raw materials, insufficient demand affecting the commencement and price difference, and the risk that the launch of new projects does not meet the expectations
