\u3000\u3 China Vanke Co.Ltd(000002) 493 Rongsheng Petro Chemical Co.Ltd(002493) )
Event: on April 25, 2022, Rongsheng Petro Chemical Co.Ltd(002493) released the annual report of 2021: the operating revenue reached 177024 billion yuan, an increase of 65.03% year-on-year; The net profit attributable to shareholders of listed companies was 12.824 billion yuan, an increase of 75.46% year-on-year; The weighted return on net assets increased by 29.95% year-on-year. The gross profit margin of sales was 26.51%, with a year-on-year increase of 6.80 percentage points; The net profit margin of sales was 13.36%, with a year-on-year increase of 0.89 percentage points.
Among them, Q4 achieved a revenue of 47.667 billion yuan in 2021, a year-on-year increase of + 60.77% and a month on month increase of + 6.07%; The net profit attributable to the shareholders of the listed company was 2.702 billion yuan, up + 63.09% year-on-year and – 24.01% month on month; The return on net assets was 5.69%, with a year-on-year increase of 1.11 percentage points and a month on month decrease of 2.33 percentage points. The gross profit margin of sales was 24.42%, with a year-on-year increase of 13.02 percentage points and a month on month decrease of 5.86 percentage points; The net sales interest rate was 10.32%, a year-on-year decrease of 1.70 percentage points and a month on month decrease of 4.41 percentage points.
Comments:
The profit of refining and chemical products has improved, and the company’s performance has reached a new height
In 2021, the company’s revenue and net profit attributable to the parent company achieved rapid growth, including revenue of 177024 billion yuan, a year-on-year increase of + 65.03%; The net profit attributable to the parent company was 12.824 billion yuan, a year-on-year increase of + 75.46%, reaching a new height. The substantial growth of the company’s performance is mainly due to the obvious benefit release of Zhejiang Petrochemical, as well as the global economic recovery, the continuous recovery of downstream terminal demand, the continuous improvement of the prosperity of the chemical industry and the enhancement of the profitability of refining and chemical products. In terms of sectors, the revenue of refined oil products reached 52.587 billion yuan, a year-on-year increase of 90.03%, and the gross profit margin reached 37.67%, a year-on-year increase of 12.05 percentage points; The revenue of chemical products reached 68.450 billion yuan, a year-on-year increase of 63.71%, and the gross profit margin reached 37.78%, a year-on-year increase of 9.08 percentage points; PTA achieved a revenue of 20.508 billion yuan, a year-on-year increase of 60.97%, and a gross profit margin of 1.07%, a year-on-year decrease of 5.86 percentage points; Polyester achieved a revenue of 14.26 billion yuan, a year-on-year increase of 40.93%, and a gross profit margin of 7.87%, a year-on-year decrease of 0.84 percentage points.
In Q4 of 2021, the company achieved a revenue of 47.667 billion yuan, a year-on-year increase of + 60.77% and a month on month increase of + 6.07%; The net profit attributable to the parent company was 2.702 billion yuan, a year-on-year increase of + 63.09% and a month on month decrease of – 24.01%. The performance fell month on month, mainly due to the rising cost of raw materials such as upstream crude oil and coal, which squeezed profits. In Q4 of 2021, the company’s gross profit margin reached 24.42%, a decrease of 5.86 percentage points month on month.
In terms of period expenses, the company’s sales / management / financial expense rate in 2021 was 0.09% / 2.60% / 1.64% respectively, with a year-on-year increase of -0.02 / + 0.33 / + 0.20pct. The increase in management expense rate was mainly due to the expansion of the management team of Zhejiang Petrochemical. In 2021, the net cash flow from the company’s operating activities reached 33.565 billion yuan, an increase of 91.72% year-on-year, mainly due to the year-on-year increase in the company’s gross profit on product sales in the current period. Meanwhile, the company’s inventory at the end of the period reached 47.110 billion yuan, up + 100.08% from the end of the previous period, mainly due to the increase in the company’s raw material procurement.
Zhejiang Petrochemical showed high profitability in phase I, and the full production of phase II will contribute to the performance increment
Zhejiang Petrochemical 40 million T / a refining and chemical integration project, as the largest single refining and chemical integration project in the world, has obvious scale advantages, and more chemical products are configured in the corresponding petrochemical products, which not only gets rid of the fluctuation dependence of a single product, but also provides abundant space for the development of downstream fine chemicals. Since the first phase of Zhejiang Petrochemical was put into operation at the end of 2019, it has contributed a large performance increment to the company. In 2021, Zhejiang Petrochemical achieved a revenue of 117545 billion yuan, a year-on-year increase of 81.11%; The net profit was 22.296 billion yuan, a year-on-year increase of 98.51%, of which Rongsheng Petro Chemical Co.Ltd(002493) held 51% shares, bringing 11.371 billion yuan of equity profit to the company. At the same time, the construction of phase II of Zhejiang Petrochemical has also been rapidly promoted. On January 13, 2022, the company announced that the oil refining, aromatics, ethylene and downstream chemicals units of phase II of Zhejiang Petrochemical have been put into full commissioning. Compared with phase I, Zhejiang Petrochemical phase II has more abundant output of fine chemical products. The full operation of phase II will significantly improve the company’s performance and help the company’s performance to a new level.
Deep processing continues to advance and downstream applications continue to expand
Relying on the 40 million T / a refining and chemical project of Zhejiang Petrochemical, the company has accelerated the layout of new chemical materials and products in the downstream by virtue of the rich basic chemical warehouse in the upstream. Among them, in the phase I and phase II projects of Zhejiang Petrochemical, high value-added new material products such as 300000 t / a EVA, 520000 T / a PC and 400000 T / a ABS have been deployed. Among them, the EVA device can produce qualified products in less than a week since it was put into operation, and all photovoltaic grade products can be produced. Zhejiang Petrochemical also actively cooperates with foreign countries to establish a Green Petrochemical innovation center with Tsinghua University to carry out the research and development of petrochemical related technologies, new materials and new products, focusing on key research directions such as “carbon dioxide capture and high value-added utilization, nylon 66 industrial chain technology and VOC governance technology”; Zhejiang Petrochemical zheyou Technology Co., Ltd. was established with UOP for catalyst R & D and production, and 20000 t / a hydrogenation catalyst will be put into operation soon; The C5 / C9 resin produced by Zhejiang Derong Chemical Co., Ltd. has realized the deep processing of C5 / C9 components. Meanwhile, Zhejiang Petrochemical α- At present, the olefin project has obtained the project record, and the relevant work is also promoting the project; The company also established Rongsheng new materials (Zhoushan), which will build a number of projects with high technology content, high growth and high added value in the middle and lower reaches of petrochemical industry in the future. At present, the preliminary work is also advancing in an orderly manner. The continuous layout and implementation of downstream deep processing projects will make full use of Zhejiang Petrochemical’s rich chemical output, promote the continuous improvement of product added value and profitability.
The high-end development of polyester products will form differentiated competitiveness
The company is a leading polyester enterprise in China. By the end of 2021, the company has a production capacity of 1.1 million tons of polyester filament, 2.7 million tons of polyester bottle chips and 250000 tons of polyester film. At the same time, the company is committed to the high-end development of polyester products. Among them, Hainan Yisheng 50000 T / a food grade recycled polyester bottle chips were successfully put into operation in December 2021, and another 90000 T / a production capacity is being promoted. After all put into operation, Hainan Yisheng will become the largest food grade RPET supplier in China; The production capacity of Yongsheng technology’s high-end film has also been continuously expanded. The first phase of 70000 T / a BOPET production capacity was successfully put into operation in December 2020, and the production of the first batch of photovoltaic backplane film orders was successfully completed in October 2021. At the same time, the second phase of 180000 t / a film production capacity of Yongsheng technology is also actively under construction, and it is expected that 70000 T / a production line will be put into operation in 2022; At the same time, Shengyuan phase II 500000 T / a differentiated fiber project is also actively promoted, and will mainly produce flame-retardant, functional and dye-free fiber products. With the continuous development of high-end polyester products, the company will get rid of the competition of traditional filaments and form differentiated advantages; At the same time, high-end differentiated products have higher product added value, and the profitability of the company’s polyester products will be continuously improved in the future.
R & D investment increased rapidly, promoting the rapid implementation of high-end new materials
In recent years, the company’s R & D investment has increased year by year. In 2021, the R & D expenditure reached 3.915 billion yuan, a year-on-year increase of 99.38%, accounting for 2.21% of revenue; The number of R & D personnel reached 2775, a year-on-year increase of 30.28%. At the same time, in 2021, the company was also listed in the top 2500 global industrial R & D investment list released by the European Commission, ranking 646 in the world, ranking first in the R & D investment of Chinese chemical enterprises. The company’s main production enterprises are national high-tech enterprises with strong R & D strength and accumulated rich process operation experience in long-term production management. Among them, the company has selected a new technical route in CICC project, and some aromatics products are made from fuel oil (cheaper than naphtha). While solving the shortage of global naphtha supply, it can greatly save the purchase cost of raw materials. At the same time, the company currently plans a number of new material products such as Poe, PMMA and nylon 66. High R & D investment and strong R & D strength help the company achieve rapid breakthrough and industrialization.
Carry out the repurchase plan to demonstrate the company’s confidence in development
Based on confidence in the company’s future development prospects and recognition of the company’s long-term value, on March 16, the company announced that it would repurchase shares by means of centralized bidding transaction. The repurchase amount is no less than RMB 1 billion and no more than RMB 2 billion. As of March 31, 2022, the company has repurchased 7.5546 million shares in total, accounting for 0.0746% of the total share capital of the company, with a total turnover of 109 million yuan. Through stock repurchase, it will effectively enhance the confidence of investors and promote the stable and sustainable development of the company. It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 16.516 billion yuan, 20.455 billion yuan and 24.051 billion yuan respectively, and the EPS will be 1.22, 1.52 and 1.78 yuan / share, corresponding to 11, 9 and 7 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.
