\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 03 Hengyi Petrochemical Co.Ltd(000703) )
Event: on April 25, the company released its annual report for 2021: the operating revenue was 128980 billion yuan, a year-on-year increase of 49.23%; The net profit attributable to the parent company was 3.408 billion yuan, a year-on-year increase of 10.94%; The weighted average return on net assets was 13.56%, an increase of 1.00 percentage points year-on-year. The gross profit margin of sales was 5.72%, a year-on-year decrease of 1.20 percentage points; The net profit margin of sales was 3.07%, a year-on-year decrease of 1.34 percentage points. Among them, Q4 achieved a revenue of 32.288 billion yuan in 2021, a year-on-year increase of + 28.60% and a month on month increase of – 9.73%; The net profit attributable to the parent company was 325 million yuan, up + 202779% year-on-year and – 61.66% month on month. The gross profit margin of sales was 2.68%, with a year-on-year increase of 2.82 percentage points and a month on month decrease of 3.01 percentage points; The net profit margin on sales was 3.25%, a year-on-year increase of 0.67 percentage points and a month on month decrease of 1.64 percentage points. At the same time, the company released the first quarterly report of 2022, realizing an operating revenue of 33.253 billion yuan, a year-on-year increase of + 7.80% and a month on month decrease of – 2.99%; The net profit attributable to the parent company was 732 million yuan, with a year-on-year increase of – 39.62% and a month on month increase of + 125.11%. The gross profit margin of sales was 5.60%, a year-on-year decrease of 2.51 percentage points and a month on month increase of 2.92 percentage points; The net sales interest rate was 3.25%, a year-on-year decrease of 1.68 percentage points and a month on month increase of 2.18 percentage points.
Comments:
The volume and price of polyester products increased at the same time, which helped the steady improvement of the company’s performance
In 2021, the company achieved a revenue of 20.566 billion yuan, a year-on-year increase of 45.77%; The net profit attributable to the parent company was 4.676 billion yuan, a year-on-year increase of 104.33%. The company’s performance achieved rapid growth. On the one hand, it benefited from the simultaneous rise of volume and price of polyester products. Among them, the sales volume of polyester products reached 7.4069 million tons in 2021, a year-on-year increase of + 22.31%; The average price reached 609256 yuan / ton, a year-on-year increase of + 47.97%; At the same time, the price of the company’s refined oil products also ushered in a substantial increase. In 2021, the average price of refined oil products reached 40831615 yuan / ton, a year-on-year increase of + 64.87%.
In terms of sectors, the company’s refining and chemical products achieved a revenue of 24.082 billion yuan in 2021, a year-on-year increase of + 66.56%, and the gross profit margin reached 3.61%, a year-on-year decrease of 0.31 percentage points; The revenue of chemical products reached 4.553 billion yuan, a year-on-year increase of + 6.23%, and the gross profit margin reached 22.58%, a year-on-year increase of 1.24 percentage points; PTA products achieved a revenue of 6.389 billion yuan, a year-on-year increase of + 34.23%, and a gross profit margin of 4.61%, a year-on-year decrease of 6.39 percentage points; The revenue of polyester filament products reached 40.789 billion yuan, a year-on-year increase of + 85.58%, and the gross profit margin reached 9.62%, a year-on-year decrease of 2.90 percentage points.
In terms of period expenses, the company’s sales / management / financial expense ratio in 2021 was 0.18% / 1.38% / 1.65% respectively, with a year-on-year rate of -0.08 / – 0.15 / – 0.66 PCT, and the period expenses were well controlled. In 2021, the net cash flow from the company’s operating activities reached 7.755 billion yuan, an increase of 54.67% year-on-year, mainly due to the company’s reserve of working capital in advance in the fourth quarter in response to the rise in raw material prices and the increase in inventory during the Spring Festival in the first quarter. Meanwhile, the company’s inventory at the end of the period reached 12.1 billion yuan, up + 25.38% from the end of the previous period, mainly due to the increase in the company’s raw material procurement.
In 2022q1, the oil price difference of finished products improved, and the company’s performance improved month on month
In Q1 2022, the company achieved a revenue of 33.253 billion yuan, a year-on-year increase of + 7.80% and a month on month increase of + 2.99%; The net profit attributable to the parent company was 732 million yuan, a year-on-year decrease of 39.62% and a month on month increase of 125.11%. The company’s performance fell year-on-year, mainly due to the decline in the profitability of polyester and other products. In Q1 2022, the market price difference of POY reached 139172 yuan / ton, a year-on-year increase of – 10.83%; The market price difference of FDY reached 156344 yuan / ton, with a year-on-year increase of – 8.05%. The narrowing of polyester price difference also led to the decline of the company’s profitability. In 2022, the gross profit margin of Q1 company reached 5.60%, with a year-on-year increase of – 2.51 percentage points and a month on month increase of + 2.92 percentage points. Compared with Q4 in 2021, the company’s performance increased significantly month on month, mainly due to the continuous improvement of the cracking price difference of refined oil in Southeast Asia, which led to the recovery of the company’s consolidation profitability. In terms of period expense ratio, the company’s sales / management / financial expense ratio in 2022 and Q1 was 0.15% / 1.28% / 1.80% respectively, with a year-on-year ratio of -0.05 / – 0.22 / + 0.32 PCT and a month on month ratio of -0.17 / + 0.10 / + 0.16 PCT; Meanwhile, in 2022, the net cash flow generated from Q1 company’s operating activities reached -3.801 billion yuan, a year-on-year decrease of – 696.59%, mainly due to the rise in raw material and product prices driven by the rise in oil prices and the increase in inventories due to the impact of the Spring Festival holiday. Southeast Asia’s refined oil market is facing a high boom, and Brunei project will fully benefit
In 2021, with the steady recovery of crude oil prices, Brunei’s phase I operation level continued to improve, and the sales of refined oil, chemicals and other products were smooth. In 2021, Hengyi Brunei achieved a revenue of 35.948 billion yuan, a year-on-year increase of 54.86%; The net profit was 1.247 billion yuan, a year-on-year increase of 161.25%. Since 2022, Southeast Asian countries have liberalized epidemic control measures, the demand of refined oil market has recovered strongly, and the supply has shrunk due to refinery shutdown, geopolitics and other reasons. The Southeast Asian refined oil market is in short supply. As the profit vane of refineries in Southeast Asia, Singapore’s refined oil cracking price difference also continued to improve. In Q1 2022, the gasoline cracking price difference was about $14.73/barrel (year-on-year + 150.01%, month on month + 4.78%), the diesel cracking price difference was about $16.48/barrel (year-on-year + 365.76%, month on month + 64.38%), and the aviation coal cracking price difference was about $13.43/barrel (year-on-year + 546.93%, month on month + 52.58%); As of April 22, 2022, the price difference of Q2 gasoline cracking in 2022 was about $19.35/barrel (mom + 31.34%), that of diesel cracking was about $31.54/barrel (mom + 91.37%), and that of aviation coal cracking was about $27.47/barrel (mom + 104.59%). The Southeast Asian refined oil market ushered in a boom cycle. The Brunei refinery of the company will also benefit from the continuous expansion of the oil price difference of finished products, and its performance is expected to usher in high-speed growth.
Layout the nylon industrial chain and improve the differentiated competition level of the company
The company is committed to the strategic layout of “crude oil aromatics PTA polyester” and “crude oil benzene CPL nylon”. While the polyester filament is bigger and stronger, the company actively lays out the nylon industrial chain. By the end of the reporting period, the company has a caprolactam production capacity of 400000 tons / year. Meanwhile, on January 22, 2022, the company announced that it plans to invest 19.723 billion yuan to build an annual output of 1.2 million tons of caprolactam polyamide industrial integration and supporting project in Qinzhou, Guangxi. The project is implemented in two phases. The first phase mainly constructs production units such as Shanghai Pudong Development Bank Co.Ltd(600000) T / a cyclohexanone, 800000 T / a hydrogen peroxide, 200000 t / a synthetic ammonia, Shanghai Pudong Development Bank Co.Ltd(600000) T / a caprolactam and Shanghai Pudong Development Bank Co.Ltd(600000) T / a polyamide polymerization. The construction of polyamide project will effectively extend the downstream industrial chain of aromatics, enrich the filament product structure of the company, form a unique “polyester + nylon” dual fiber driving mode among Chinese peers, and enhance the differentiated competitiveness of the company; At the same time, it can also effectively improve the overall profitability of the company. According to the announcement, the project is expected to bring an average annual operating revenue of 15.946 billion yuan after its completion, which will help the rapid and healthy development of the company.
“PTA polyester filament” continues to expand capacity, and the leading position of polyester is stable
The company is a leading polyester enterprise with an integrated industrial chain of “crude oil PX PTA polyester”. At present, the polyester production capacity is 7.765 million tons / year, including 7.025 million tons / year of polyester yarn and 740000 tons / year of polyester chips. In order to further consolidate the leading position of polyester and enhance the scale advantage, the company continues to promote the construction of new projects. At present, the capacity under construction is up to 1.85 million tons / year, including the capacity of 500000 tons / year new functional polyester filament in Haining, the remaining 250000 tons / year polyester filament capacity in Fujian Yijin, and the capacity of 1.1 million tons / year polyester staple fiber in Suqian. In order to provide strong support for the company’s Polyester business, the company’s PTA production capacity continued to expand. By the end of 2021, the company’s PTA production capacity had reached 16 million tons / year; Yisheng new material 2 3 million T / a PTA capacity was also put into operation in early 2022. With the continuous expansion of the company’s PTA production capacity, the company’s PTA scale advantage and cost control ability will be further improved, with significant integration advantages. Affected by the rising price of raw materials in the upstream and the sluggish operation in the downstream under the background of the epidemic, polyester filament is under pressure in the short term. In 2022q1, the average market price of POY reaches 7978.0 yuan / ton, with a year-on-year increase of + 16.63% and a month on month increase of + 1.27%; The price difference reached 139172 yuan / ton, with a year-on-year increase of -10.83% and a month on month increase of -20.79%. The average market price of FDY reached 814972 yuan / ton, with a year-on-year increase of + 16.76% and a month on month increase of + 2.78%; The price difference reached 156344 yuan / ton, a year-on-year increase of -8.05% and a month on month increase of -13.52%. In the medium and long term, the polyester filament production capacity is in an orderly expansion state, the industry concentration continues to improve, and the leading voice continues to strengthen. With the recovery of the epidemic situation and the recovery of downstream demand, we are optimistic that polyester filament will maintain a long-term boom, and Hengyi Petrochemical Co.Ltd(000703) as a leading polyester enterprise will fully benefit.
It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 4.248, 5.310 and 6.138 billion yuan respectively, and the EPS will be 1.16, 1.45 and 1.68 yuan / share, corresponding to 6, 5 and 4 times of PE, maintaining the “buy” rating.
Risk tips: the implementation of policies, the construction progress of new production capacity is not up to expectations, the contribution performance of new production capacity is not up to expectations, the price of raw materials fluctuates, the change of environmental protection policies, the economy drops sharply, and the price of crude oil fluctuates sharply.
