Satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) )
Event description
On April 27, satellite chemical disclosed the first quarter report of 2022. In the first quarter of 2022, the company realized an operating revenue of 8.138 billion yuan, a year-on-year increase of 124.54%; The net profit attributable to the parent company increased by 98.44 billion yuan year-on-year; The non net profit deducted was 1.54 billion yuan, a year-on-year increase of 119.14%. 22q1 company's gross profit margin was 29.06%, down 3.67 percentage points year-on-year; The net interest rate was 18.82%, down 2.33 percentage points year-on-year.
The performance in the first quarter increased significantly year-on-year, and the profit stability of light hydrocarbon projects was prominent
Jiangsu Lianyungang Port Co.Ltd(601008) phase I project operates stably, and the cost advantage of light hydrocarbon route is prominent. The company's performance in the first quarter increased significantly year-on-year, realizing a net profit attributable to the parent of RMB 1.521 billion, with a year-on-year increase of 15.21% and a month on month decrease of 13.14% compared with 21 Q4. After the outbreak of the conflict between Russia and Ukraine, the global oil price soared, and the price of Brent crude oil once rose to $120 / barrel, the highest level since August 2014. The overall Q1 petrochemical industry is under pressure due to high oil prices and weak demand for downstream products, but the company's performance is relatively stable, mainly because the company's Jiangsu Lianyungang Port Co.Ltd(601008) phase I ethane cracking unit has strong cost competitiveness under high oil prices. The prices of 22q1 crude oil and naphtha increased by 20% and 19% month on month, and the price of ethane increased by only 4% month on month. The downstream demand for ethylene is sluggish, and the price difference of 22q1 ethylene ethane increased by 6% month on month, which is significantly better than other competitive routes. Therefore, the cost advantage of ethylene light hydrocarbon route is significant under the background of high oil price.
The price difference of propane dehydrogenation was greatly repaired, and the pattern of acrylic acid and ester in the downstream was improved. The average market prices of acrylic acid and butyl acrylate of 22q1 company were - 5% and - 2% month on month, and the price of raw material propane was + 5% month on month, which remained stable as a whole. In terms of price difference, the price differences of propane dehydrogenation (PDH), polypropylene propylene, acrylic propylene and butyl acrylate acrylic acid were + 98%, - 33%, - 10% and - 54% month on month respectively. The price difference of PDH was significantly repaired, and the main business acrylic acid and ester continued to be in a high boom. The high prosperity of acrylic acid and ester is mainly due to the improvement of industry structure. In addition to companies, there are few new production capacity in China, and overseas production capacity is gradually withdrawn. In addition, with the gradual decline of propane heating demand, the price difference of propane dehydrogenation is expected to continue to be repaired.
The cost rate continues to decline and the cost control force is strengthened. The three expenses of the company decreased year-on-year, of which the sales expenses accounted for 0.31% of the operating revenue, a year-on-year decrease of 0.86 percentage points; Administrative expenses accounted for 0.98%, with a year-on-year increase of 1.66 percentage points; Financial expenses accounted for 3.61%, a year-on-year decrease of 0.53 percentage points; R & D expenses accounted for 2.21%, a year-on-year decrease of 0.90 percentage points. The company's net cash flow from operating activities was 1.316 billion, which became positive year-on-year.
Build a platform for light hydrocarbon basic raw materials, add new materials and open up growth space
Jiangsu Lianyungang Port Co.Ltd(601008) ethane cracking phase II and 800000 ton PDH projects are progressing steadily Jiangsu Lianyungang Port Co.Ltd(601008) Petrochemical's phase I project with an annual output of 1.35 million tons of PE, 2.19 million tons of EOE and 260000 tons of ACN was put into operation on May 20. Since then, the operation has been stable and the performance has increased significantly; The phase II project (400000 T / a high-density polyethylene, 730000 T / a ethylene oxide and Shanghai Pudong Development Bank Co.Ltd(600000) T / a styrene) is expected to be put into trial production in mid-2022, which will further improve the profitability of the company. In addition, the company has signed a cooperation and investment framework with Zhejiang Dushan Port Management Committee and Air Liquide (China), in which the company has a total investment of about 10.2 billion yuan to build 800000 tons of PDH, 800000 tons of butyl octanol, 120000 tons of neopentyl glycol and supporting devices. It is expected to be completed and put into operation by the end of 2023.
The project of green chemical new material industrial park will be completed and put into operation successively within this year. At the end of 2021, the company announced to invest in the new green chemical new material industrial park project, with a total investment of about 15 billion yuan. The construction contents mainly include an annual output of 200000 tons of ethanolamine (EOA), 800000 tons of polystyrene (PS) and 100000 tons α- Olefins and supporting Poe, 750000 ton carbonate series production units and related supporting projects are implemented step by step in three phases. The company announced that at present, the phase I phase I Project (including 100000 t / a ethanolamine unit, 400000 T / a polystyrene unit, 150000 T / a battery grade carbonate unit and 300000 t / a carbon dioxide refining and recovery unit) has been successfully promoted, the long-term equipment has been ordered, the civil construction has begun, and the trial production is expected to be completed in the third quarter of 2022. The company will gradually accelerate the transformation from a new integrated platform for light hydrocarbon materials to a new integrated platform.
Investment advice
We believe that the company's C2 project benefits from the increase in the price difference between raw materials and products with high oil prices, and the downstream pattern of C3 project is maintained in a good view. In addition, C2 phase II and green chemical new material industrial park projects will be put into operation successively within the year to contribute to the performance. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 8.660 billion, RMB 9.855 billion and RMB 13.242 billion respectively, with a year-on-year increase of 44.2%, 13.8% and 34.4% respectively, corresponding to 6.55, 5.75 and 4.28 times of the current share price PE respectively, maintaining the "buy" rating.
Risk tips
Risk of sharp decline in product price; The risk that the construction progress of the project is less than expected.
