\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 117 China National Chemical Engineering Co.Ltd(601117) )
Event: on April 27, 2022, China National Chemical Engineering Co.Ltd(601117) ( China National Chemical Engineering Co.Ltd(601117) ) released the annual report of 2021: the operating revenue was 137289 billion yuan, a year-on-year increase of 25.43%; The net profit attributable to the shareholders of the listed company was 4.633 billion yuan, a year-on-year increase of 26.64%; The weighted average return on net assets was 11.21%, an increase of 0.69 percentage points year-on-year. The gross profit margin of sales was 9.49%, a year-on-year decrease of 1.53 percentage points; The net sales interest rate was 3.64%, an increase of 0.13 percentage points year-on-year. Among them, Q4 achieved a revenue of 47.303 billion yuan in 2021, an increase of 8.94% year-on-year and 38.84% month on month; The net profit attributable to the parent company was 1.735 billion yuan, an increase of 96.21% year-on-year and 79.63% month on month; The weighted average return on net assets was 3.55%, an increase of 1.18 percentage points year-on-year and 1.36 percentage points month on month. The gross profit margin of sales was 9.45%, a year-on-year decrease of 0.62 percentage points and a month on month increase of 0.74 percentage points; The net sales interest rate was 3.97%, with a year-on-year increase of 1.47 percentage points and a month on month increase of 0.87 percentage points. At the same time, the company released the first quarterly report of 2022: the operating revenue was 35.291 billion yuan, an increase of 41.54% year-on-year and a decrease of 25.39% month on month; The net profit attributable to the shareholders of the listed company was 977 million yuan, an increase of 19.73% year-on-year and a decrease of 43.69% month on month; The weighted average return on net assets was 2.01%, a year-on-year decrease of 0.13 percentage points and a month on month decrease of 1.54 percentage points. The gross profit margin of sales was 7.62%, a year-on-year decrease of 1.24 percentage points and a month on month decrease of 1.83 percentage points; The net sales interest rate was 3.05%, a year-on-year decrease of 0.27 percentage points and a month on month decrease of 0.92 percentage points.
Comments:
The revenue and profit increased significantly year-on-year, highlighting the company’s operating ability
In 2021, the company’s operating performance achieved steady growth, with an operating revenue of 137289 billion yuan, a year-on-year increase of 25.43%; The net profit attributable to shareholders of listed companies was 4.633 billion yuan, a year-on-year increase of 26.64%. The increase of orders promoted the performance improvement. In 2021, the newly signed contract amount of the company was 269.77 billion yuan, an increase of 7.41%. In terms of business areas, the newly signed chemical engineering contracts amounted to 19.486 billion yuan, an increase of 3.91%, of which the newly signed chemical / Petrochemical / coal chemical contracts were 1277273993526.424 billion yuan respectively, a year-on-year increase of 55.1% / – 24.83% / – 48.49%; The newly signed contracts for infrastructure, environmental governance and other related diversified businesses amounted to 75.684 billion yuan, an increase of 17.55%, of which the newly signed contracts for environmental governance amounted to 10.447 billion yuan, a year-on-year increase of 24.91%. The dominant position of the company’s main business is stable, the leading position of chemical industry is continuously consolidated, the influence and voice of the industry continue to expand, the business field of infrastructure continues to expand, and the business model of ecological and environmental protection continues to innovate. Benefiting from the promotion of China’s steady growth policy, the company’s engineering business is expected to maintain a steady growth trend. In addition, the prosperity of chemical products increased and the price of caprolactam increased. The company’s industrial projects achieved a revenue of 6.969 billion yuan in 2021, with a year-on-year increase of 70.41%, a gross profit margin of 17.15%, and a year-on-year increase of 2.21 percentage points.
In the first quarter, the company realized an operating revenue of 35.291 billion yuan, a year-on-year increase of 41.54% and a month on month decrease of 25.58%; The net profit attributable to shareholders of listed companies was 977 million yuan, with a year-on-year increase of 19.73% and a month on month decrease of 43.69%. The newly signed contract amount was 103914 billion yuan, a significant increase of 90% year-on-year, completing the “good start” in the first quarter, laying a solid foundation for the “steady growth” of the whole year. 99.031 billion yuan of newly signed contracts for construction projects, including 69.403 billion yuan of newly signed contracts for chemical engineering; 27.022 billion yuan of newly signed infrastructure contracts; The newly signed contracts for environmental governance amounted to 2.606 billion yuan. The newly signed contract for survey, design, supervision and consultation is 1.342 billion yuan; Industrial and new material sales of 2.294 billion yuan; The newly signed contracts for modern services amounted to 1.137 billion yuan. In the first quarter, affected by the epidemic and geographical game, the price of bulk raw materials increased, and the operating cost of the company was 32.603 billion yuan, a year-on-year increase of 43.47%. The gross profit margin of sales was 7.62%, a year-on-year decrease of 1.24 percentage points and a month on month decrease of 0.27 percentage points. In Q1 2022, the company strengthened the control of expenses, and the sales expense rate was 0.24%, a year-on-year decrease of 0.08 percentage points and a month on month decrease of 0.09 percentage points; The management expense ratio was 1.96%, a year-on-year decrease of 0.45 percentage points and a month on month increase of 0.61 percentage points; The financial expense rate was 0.33%, a year-on-year decrease of 0.15 percentage points and a month on month decrease of 0.15 percentage points. Construction in progress in the chemical industry has rebounded, and the company’s engineering business is expected to benefit
The chemical industry is cyclical. In 2020, affected by the epidemic, the economy weakened and the investment in the chemical industry slowed down. With the global economic recovery, the new demand of the chemical industry is strong, and the overseas production is limited. The rebound of China’s chemical products has led to the rapid recovery of industrial investment. In 2021, under the dual carbon policy, the expansion speed of some differentiated production capacity in the chemical industry has accelerated, resulting in a differentiated expansion cycle. From the perspective of construction in progress / fixed assets of Listed Companies in the chemical industry, the construction in progress in the chemical industry has been expanding since 2018. It fell slightly affected by the epidemic in 2020 and ushered in a strong rebound in 2021. At present, driven by the dual control of energy consumption, the transformation of chemical product market, the continuous improvement of chemical facility safety and environmental protection requirements, the whole industry has rapidly eliminated backward production capacity, accelerated the transformation of old and new kinetic energy, accelerated the process of chemical enterprises leaving the city and entering the park, and there are great market opportunities in the fields of chemical plant relocation and park upgrading in the future. At the same time, the dual carbon policy and environmental protection requirements have spawned the demand for new chemical products, and the domestic substitution process in the field of new materials has accelerated. Through years of technology accumulation, the company is expected to benefit from the explosive growth of new material engineering projects.
The dominant position of the main business has been continuously consolidated, and China’s overseas business has operated steadily
The company made every effort to take the road of specialization, related diversification and international development. In 2021, the newly signed contract amount of the company was 220117/49.653 billion yuan at home and abroad respectively, with a year-on-year increase of 9.13% / 0.37%. In the Chinese market, the company implements major national regional strategies and regional coordinated development strategies, and strengthens in-depth docking with local governments, state-owned central enterprises and local state-owned enterprises in key areas. The amount of newly signed contracts in the region has increased by 151% compared with that before its establishment, and the regional large-scale operation has achieved remarkable results. China’s key projects in the main industry have received good news frequently, winning the bid of 8.7 billion yuan for 20 bid sections of Yulong Island refining and chemical integration project, 6.3 billion yuan for Guangxi Huayi new materials and chlor alkali project, more than 5 billion yuan for Wanhua Chemical Group Co.Ltd(600309) (Fujian) MDI project and TDI project, 2.25 billion yuan for comprehensive treatment of ecological environment in Xiangshan area, Ma’anshan, one of the first 36 EOD pilot projects, and 1.29 billion yuan for Jiangsu Lianyungang Port Co.Ltd(601008) ecological environment improvement project, Chongqing Qihe River Basin treatment project is 810 million yuan.
At the same time, under the harsh conditions of the overseas epidemic, the company vigorously implemented the strategic layout of “one body and two wings”, made every effort to overcome the impact of the epidemic spread, adhered to the “management with masks”, and made breakthroughs in key overseas operations and blossomed in multiple points. The Southeast Asian market has sprung up, with a newly signed contract amount of 11.57 billion yuan in the Indonesian market, a year-on-year increase of 31.5%. In the African market, China won the bid for the guinea bauxite supporting alumina refinery project of 11.51 billion yuan, achieving a breakthrough in market development in Guinea, Togo, Botswana and other countries. The strategy of “strengthening the enterprise through industry” has made solid progress. Several projects have made steady progress. The thermal insulation energy-saving material aerogel project has been successfully started at one time, the adiponitrile nylon new material and degradable plastic projects are about to be put into operation, and other projects have made breakthrough progress. 1) The Hualu Xincai aerogel gel project was successfully started on February 27, 2022. At present, the first batch of qualified silicon-based nano aerogel composite insulation felt products have been produced. 2) Tianchen Qixiang adiponitrile project has entered the staggered period of intermediate delivery and trial production, and the bulk chemical raw materials required for production have entered the site. The acrylonitrile unit has produced qualified acrylonitrile products, and the hexanediamine unit was successfully started up at one time on March 31. The unit successfully produced the first batch of qualified products, and the product quality reached high-grade products. 3) The first phase of the degradable plastic PBAT project with an annual output of 100000 tons invested and constructed by Zhonghua Tianye new materials Co., Ltd., a subsidiary of the company’s chemical industry third Design Institute Co., Ltd., has been mechanically completed and entered the trial production stage. In 2022, all major new industrial projects of the company will be completed and put into normal production and operation, bringing new profit growth points to the company. 4) Breakthroughs have also been made in many other projects. The company plans to invest 15 billion yuan to build projects such as Shanghai Pudong Development Bank Co.Ltd(600000) T / a propylene oxide, 900000 T / a hydrogen peroxide, 200000 t / a nylon 66 and 100000 t / a nylon 12, which shows that the company has achieved coordinated development in the fields of advanced chemical new materials, special high-end chemicals and other industries and new materials, such as the transformation of technological innovation achievements and the extension of high-end value chain.
Specialize in core technologies to help engineering and industry move towards a broader market
The company has mastered and owned a series of patented process technologies and proprietary engineering technologies in the fields of chemical and petrochemical industry, modern coal chemical industry, new chemical materials and rubber engineering equipment through independent innovation and collaborative innovation of industry, University and research. Over the years, the company has continued to promote technological innovation, promote collaborative innovation between industry, University and research, and build an integrated development of “technology + industry”. In the field of new materials, we have developed and mastered the core technologies in the field of new chemical materials and new energy, such as caprolactam, adiponitrile, diphenylmethane diisocyanate (MDI), toluene diisocyanate (TDI), polysilicon, silicone, phenol acetone, polycarbonate and molten salt heat storage, reaching the international advanced level. In the field of rubber engineering and equipment, China National Chemical Engineering Co.Ltd(601117) the special rubber extrusion equipment has the international leading level. It is the only R & D and manufacturing enterprise in China that can provide four compound and five compound extrusion units. Its extrusion units are the only supplier designated by Michelin in China. In addition, China National Chemical Engineering Co.Ltd(601117) is focusing on a number of medium and high-end high value-added product technology fields such as polyolefin elastomer (POE), environmental protection catalyst, PBAT, ASA resin, polyimide, flame retardant nylon, nylon 12, waste gasification and MCH hydrogen storage, orderly promoting the small-scale pilot research and development, pilot scale-up and industrial transformation of key technologies, and continuously extending the product chain, industrial chain and value chain of R & D and industrial sectors. At present, the company has a total of 3797 authorized patents and 228 proprietary technologies; It has won 395 provincial and ministerial level and above science and technology awards and 360 provincial and ministerial level and above construction methods. Focus on building “double carbon” overall solutions. Under the double carbon development strategy, the company has a large growth space
The company attaches great importance to the industrial opportunities brought by double carbon, makes a strategic layout in the field of double carbon, and establishes China National Chemical Engineering Co.Ltd(601117) carbon neutralization science and Technology Research Institute. Focusing on the clean and low-carbon energy structure, the synergy of multi-energy complementary industries, and the improvement of industrial process energy efficiency, the company carries out scientific and technological research and industrial application in the directions of carbon neutralization, catalysis and green processes, high-end new chemical materials, chemical environmental protection and so on. Under the dual carbon development strategy, the company is expected to become an important supplier of carbon neutralization solutions in China. In terms of hydrogen energy industry, the company has built a high-temperature waste to hydrogen oil and hydrogen energy industry demonstration project based on the comprehensive solution of high-temperature gasification and hydrogen storage of urban waste in Fangshan, Beijing in 2021. The trial operation of the project has opened up the whole system process and stably produced hydrogen with a concentration of 99.9%. In terms of photovoltaic industry, Hualu company of China National Chemical Engineering Co.Ltd(601117) won the design contract of almost all polysilicon projects newly started in China in 2020. It has successively provided more than 50 technical services for China’s polysilicon, and the overall design capacity accounts for more than 90% of the country’s total capacity. In terms of industrial energy conservation, focusing on “carbon reduction at the source, carbon reduction in the process and carbon fixation at the end”, carry out technological research and development and layout to form carbon cycle and resource utilization of CO2, involving soda ash, nitrogen fertilizer, hydrogen energy, photovoltaic, coking and other fields
It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be RMB 6.486 billion, RMB 7.386 billion and RMB 8.502 billion respectively, and EPS will be RMB 0.89, 1.01 and 1.17/share, corresponding to PE of 9.98, 8.76 and 7.61 times, maintaining the “buy” rating.
Risk tips: increased market competition risk, lower than expected downstream demand risk, production safety and environmental protection risk, lower than expected project construction progress risk, lower than expected global epidemic control risk, lower than expected downstream demand risk, price fluctuation risk of industrial products, and failure risk of projects under research.
