Satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) )
Event:
On April 26, the company released the first quarterly report of 2022: in Q1 of 2022, the company achieved a revenue of 8.138 billion yuan, a year-on-year increase of 124.54% and a month on month decrease of 4.70%; The net profit attributable to the parent company was 1.521 billion yuan, a year-on-year increase of 98.44% and a month on month decrease of 13.12%. In 2022, the gross profit margin of Q1 reached 29.06%, down 3.67 percentage points year-on-year and 1.98 percentage points month on month; The net interest rate reached 18.82%, down 2.33 percentage points year-on-year; Fell 1.73 percentage points month on month.
Key investment points:
The contribution of C2 project increased, and the performance of Q1 increased significantly year-on-year
In Q1 2022, the company’s performance increased significantly year-on-year, mainly due to the smooth operation of the first phase of the company’s C2 project in May 2021, with obvious benefit release, which brought a significant increase in the company’s production and sales. In Q1 2022, the company achieved a revenue of 8.138 billion yuan, a year-on-year increase of 124.54% and a month on month decrease of 4.70%; The net profit attributable to the parent company was 1.521 billion yuan, a year-on-year increase of 98.44% and a month on month decrease of 13.12%. Compared with the fourth quarter of 2021, the company’s performance has declined to a certain extent. On the one hand, due to the impact of the Spring Festival holiday and the epidemic, the downstream operating load has declined, which has a certain impact on the company’s production and sales; On the other hand, the rising prices of propane and other raw materials have compressed profits to a certain extent. In 2022, the gross profit margin of Q1 company reached 29.06%, down 3.67 percentage points year-on-year. Fell 1.98 percentage points month on month.
In terms of period expense ratio, the company’s sales / management / financial expense ratio in 2022 and Q1 was 0.31% / 4.60% / 1.55% respectively, with a year-on-year ratio of -0.86 / – 2.55 / + 0.54 PCT and a month on month ratio of + 0.24 / – 0.96 / – 0.47 PCT, and the period expense was well controlled; Meanwhile, in 2022, the net cash flow from Q1 company’s operating activities reached 1.316 billion yuan, a year-on-year increase of 458.48%, mainly due to the negative net cash flow due to the increase of operating receivables in the same period of last year and the year-on-year increase in this period
The price of acrylic acid has gradually picked up and is optimistic about the continuation of the boom
At present, the company has a production capacity of 660000 T / a acrylic acid and 750000 T / a acrylic acid. Affected by the epidemic, some downstream enterprises stopped production and logistics were limited, driving the decline of acrylic acid demand and price. As of April 26, the average market price of Q2 acrylic acid in 2022 reached 1255385 yuan / ton, with a year-on-year increase of + 32.05% and a month on month increase of – 9.87%; The price difference reached 720343 yuan / ton, with a year-on-year increase of + 21.44% and a month on month increase of – 17.58%. Although the price difference decreased month on month, it is still at a historically high level and shows strong profitability. At the same time, with the gradual control of the epidemic situation, the resumption of work and production of downstream enterprises and the recovery of logistics and transportation, the demand for acrylic acid gradually warmed up and the price began to rise. The average price of acrylic acid rose from 13150 tons on December 26 to 13150 tons on December 26; According to the satellite chemical information official account, the quotation of East China acrylic acid of the company rose from 14000 yuan / ton on April 18 to 15200 yuan / ton on April 26. With the control of the epidemic, we are optimistic about the recovery of acrylic acid demand after the epidemic and the continuation of the prosperity of the industry.
C2 phase II and supporting new materials will soon be put into operation, injecting growth power into the company. The company has steadily promoted the diversified development strategy and actively arranged C2 industrial chain projects. In May 2021, the first phase of C2 project was completed and put into operation. The production capacity mainly includes one set of 400000 T / a HDPE unit and two sets of 730000 / 910000 T / a EO / EG units. The downstream supporting 250000 T / a polyether large monomer unit was also put into operation in October 2021, contributing to the performance increment of the company. At the same time, the company accelerated the construction of phase II of C2 project, which mainly includes 400000 T / a HDPE, 730000 T / a ethylene oxide and Shanghai Pudong Development Bank Co.Ltd(600000) T / a styrene. At present, the main equipment has been installed and is expected to be put into trial production in 2022. In order to give full play to the advantages of the industrial chain and improve the added value of products, the company has laid out the green new material industrial park project based on the C2 project. The first phase (phase I) of the project mainly includes 100000 t / a ethanolamine, 400000 T / a polystyrene, 150000 t / a battery grade carbamate, etc. at present, the construction has been started, and the trial production is expected to be completed in the third and fourth quarters of 2022; At the same time, there are 100000 tons / year of ethanolamine and 100000 tons / year in the green new material industrial park α Olefins and supporting Poe, Shanghai Pudong Development Bank Co.Ltd(600000) T / a battery grade carbonate and 400000 T / a polystyrene are also continuously promoted. C2 phase II and downstream deep processing projects have been put into operation one after another. On the one hand, the company’s production capacity has been greatly increased and growth momentum has been injected into the company’s development. At the same time, the production of ethanolamine, carbonate and other new materials will form a downstream product matrix of ethylene oxide with ethylene glycol and polyether monomers, give full play to the advantages of the industrial chain, facilitate the switching between products, maximize the profits of product series, and greatly enhance the resistance to the risk of price fluctuation of a single product.
The profit forecast and investment rating predict that the net profit attributable to the parent company from 2022 to 2024 will be RMB 8.149 billion, RMB 10.673 billion and RMB 13.363 billion respectively, corresponding to PE of 9.0, 6.8 and 5.5 respectively, maintaining the “buy” rating
Risk warning: economic downturn; The project construction is 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.
