\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 426 Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) )
Event: Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) released the first quarterly report of 2022. During the reporting period, the company achieved a revenue of 8.115 billion yuan, up + 62.2% year on year and – 3.4% month on month; The net profit attributable to the parent company was 2.429 billion yuan, a year-on-year increase of + 54.13% and a month on month increase of + 47.91%.
According to the announcement, the company invested 3.078 billion yuan and 1.031 billion yuan respectively in the construction of nylon 66 high-end new materials and high-end solvent projects, with a construction period of 24 and 20 months respectively.
The Q1 performance of the company is in line with expectations, and the repair of product price difference is the main reason. According to the announcement, the sales volume of caprolamine and caprolactam increased by 10% – 22%, and the sales volume of organic fertilizer and caprolactam increased by 10% – 22%; In terms of price, our market tracking data shows that since 22q1, the boom of the company’s main products has continued, and the price difference has differentiated with the decline of bituminous coal price. In terms of sectors, the price difference of organic amine, adipic acid and intermediate products has performed well, while the price difference of DMF and adipic acid has increased by + 66%, + 75% year-on-year, and + 8%, + 24% month on month. The high boom of organic amine sector has made a great contribution to the performance; Acetic acid and its derivatives weakened, and the price difference of Q1 acetic acid was – 30% month on month; Fertilizer and polyol sector Q1 has been repaired, and the price difference of urea and butyl octanol is + 18% and + 1% month on month. Generally, the repair of price difference is the main reason for the performance growth in the first quarter. To sum up, 22q1 company achieved a gross profit of 3.168 billion yuan (year-on-year + 57%, month on month + 42%), and the expense rate (four fees & taxes) was 4.1% (year-on-year + 0.8pct), which continued to maintain a low level (see the following for detailed data chart).
The industrial chain integration of high-end solvent and nylon 66 new material project has obvious supporting advantages. According to the announcement, the cash paid by 22q1 company for the purchase and construction of fixed assets, intangible assets and other long-term assets was 884 million yuan, a year-on-year increase of + 41%; In terms of new projects, after the completion and operation of the company’s high-end solvent project, it can produce Shanghai Pudong Development Bank Co.Ltd(600000) tons of DMC (300000 tons for export), 300000 tons of EMC and 50000 tons of Dec per year, and it is expected to realize an annual profit of 701 million yuan; After the nylon 66 project is completed and put into operation, it can produce 80000 tons of nylon and 200000 tons of adipic acid (148000 tons for export) and 13500 tons of dicarboxylic acid per year. It is expected that the annual profit of 534 million yuan can be realized. Relying on the integrated support of its own industrial chain, the two projects are conducive to giving full play to the advantages of low-cost + flexible co production of the company, expanding the matrix of high value-added products and accelerating the high-end process of the base of the Department.
Investment suggestion: we expect the net profit attributable to the parent company from 2022 to 2024 to be 7.36 billion yuan, 8.05 billion yuan and 8.98 billion yuan respectively, maintaining the Buy-A investment rating.
Risk tip: the product price has fallen sharply, and the project progress is less than expected
