\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 03 Hengyi Petrochemical Co.Ltd(000703) )
In 2021, the company realized a net profit attributable to the parent company of 3.41 billion yuan, with a year-on-year increase of 10.9%, the best level in history
The company achieved a year-on-year revenue of 128.9 billion yuan and a year-on-year revenue of + 4.92 billion yuan in 2021; The net profit was 3.96 billion yuan, a year-on-year increase of + 3.8%; The profit distribution plan is to distribute a cash dividend of 2 yuan for every 10 shares; In the first quarter, the company achieved a revenue of 33.25 billion, a year-on-year increase of 7.63%, and a net profit attributable to the parent company of 730 million, a year-on-year decrease of 39.4%.
The profits of refining and chemical industry and polyester sector improved significantly
As one of the major importers of refined oil products in the world, Southeast Asia imported nearly 80 million tons of gasoline and diesel oil in 2021. In 2021, as the epidemic situation in Southeast Asia eased, the market demand gradually warmed up, and the price difference of refined oil cracking continued to repair. In 2021, the revenue of petrochemical sector was 36.09 billion, with a year-on-year increase of 51.7%; Gross profit was 2.46 billion, a year-on-year increase of 18.3%. In 2022, with the liberalization of epidemic control measures and the active implementation of resumption of work and production in many Southeast Asian countries, the demand for refined oil in Southeast Asia has recovered strongly. At the same time, some refineries in Southeast Asia have been shut down in recent years and the new capacity is insufficient. The refined oil sector is still expected to maintain a high outlook.
With the launch of multiple sets of PTA and chemical fiber production capacity and the rise of superimposed product prices, the revenue and profit scale of the chemical fiber sector increased significantly. In 2021, the revenue of the chemical fiber sector was 45.1 billion, a year-on-year increase of 81%; The gross profit was 4.16 billion, an increase of 33.8% year-on-year. With the further optimization of the market concentration of the polyester industry, the competition order of the industry continued to improve and the development environment became more benign. As one of the leading enterprises, the company will accelerate the expansion of downstream chemical fiber business in various ways, and is expected to enjoy the profit improvement brought by the good prospect of the industry.
Orderly release of capacity under construction
Chemical fiber: Haining Hengyi New Material Co., Ltd.’s “1 million tons of differentiated environmental protection functional fiber construction project” and Fujian Yijin Chemical Fiber Co., Ltd.’s “566000 tons of new functional fiber project” were put into operation in 2021. The polyester sector of the company focuses on the deployment of polyester POY and FDY spinning oiling agent industrialization projects, and the layout of biodegradable polyester, bio based polyester, foamed polyester and other medium and long-term projects; Continue to promote the construction of major strategic projects such as 1.2 million tons of caprolactam polyamide integration and supporting projects and Suqian Yida 1.1 million tons of new environmental protection differentiated fiber project.
PTA: the 3 million ton PTA of Yisheng new material 1 line will be put into operation in 2021; The 3 million ton PTA of the 2 line was officially put into operation in January 2022.
Refining and chemical: at present, Brunei phase II project has obtained the preliminary approval letter from Brunei government. According to the project planning, the Hydraulic Reclamation Construction of the embankment is being carried out in an orderly manner. The project will help the company further ensure the stable supply of raw materials, enhance the advantages of collaborative operation of upstream and downstream industries, build a core circle of the the Belt and Road for ASEAN development, and gradually build itself into a petrochemical enterprise with global comprehensive strength.
Profit forecast and rating: after the Russian Ukrainian war, there was a shortage of refined oil market and the price difference of overseas refined oil cracking widened. The profit of Hengyi Brunei project we simulated and tracked improved. It is expected that the profit of 22 / 23 / 24 years is 3.5/4.3 billion, corresponding to PE of 7.7/6.8/6.3 respectively, maintaining the “buy” rating.
Risk warning: risk of delayed commissioning of refining and chemical projects; Risk of polyester profit decline; Oil price fluctuation risk
