\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 233 Tongkun Group Co.Ltd(601233) )
The performance of the annual report increased significantly & Q1 cost dragged down, and the contribution of new projects and Zhejiang Petrochemical increased. Maintaining the “buy” rating, the company released its annual report. In 2021, it achieved a revenue of 59.13 billion yuan, a year-on-year increase of + 29.0%, a net profit attributable to the parent company of 7.33 billion yuan, a year-on-year increase of + 158.4%, and a deduction of non net profit of 7.29 billion yuan, a year-on-year increase of + 163.5%. At the same time, the company released its first quarterly report. In 2022, Q1 achieved a revenue of 12.99 billion yuan, a year-on-year increase of + 16.7%, and the net profit attributable to the parent company was 1.5 billion yuan, a year-on-year increase of – 12.5%, deducting non net profit of 1.49 billion yuan, a year-on-year increase of – 14.2%. Considering that the crude oil price remains high and the raw material PX / PTA price of Q1 company rises sharply year-on-year in 2022, we appropriately reduce the profit forecast and add the forecast for 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 80.1/94.6 (previous value 103.9 / 120.7) / 10.9 billion yuan respectively, with a year-on-year increase of 9.3% / 18.1% / 15.2%; EPS is 3.32/3.93/4.52 yuan respectively, corresponding to 4.6/3.9/3.4 times of PE of the current stock price. The company’s new projects are gradually put into operation, and Zhejiang Petrochemical phase II is expected to contribute to the increment. It is still growing in the future and maintains the “buy” rating.
The simultaneous rise in volume and price led to a significant increase in performance in 2021, and the sharp rise in cost dragged down Q1 performance
The volume and price of polyester filament rose simultaneously in 2021: in 2021, the sales volume of polyester filament was 7.18 million tons, with a year-on-year increase of + 9.5%. The selling prices of POY, FDY and DTY were 6629, 7170 and 8811 yuan / ton respectively, with a year-on-year increase of + 36.3%, + 29.5% and + 33.2%. The prices of raw materials Px, PTA and MEG were + 38.4%, + 30.8% and + 35.4% respectively. The gross profit per ton of POY, FDY and DTY were 908, 770 and 1035 yuan / ton respectively, with a year-on-year increase of + 196.9%, + 32.2% and + 31.8%. The rise of product prices widened the price difference and greatly increased the gross profit per ton, In 2021, the company’s performance increased significantly year-on-year. 2022q1 cost soared: in 2022, the sales volume of Q1 polyester yarn was 1.65 million tons, with a year-on-year increase of + 10.3%. The selling prices of POY, FDY and DTY were 6939, 7588 and 8911 yuan / ton respectively, with a year-on-year increase of + 16.7%, + 15.0% and + 10.9%. The prices of PX, PTA and MEG were + 40.8%, 38.0% and + 0.4% year-on-year. The sharp rise in oil price caused the price increase of main raw material PX / PTA to be higher than that of products, and the rise in cost temporarily dragged down Q1 performance. With the easing of the epidemic, the increase of downstream demand supports the rise of product prices, the decline of high crude oil prices is expected to reduce costs, and the price difference of polyester filament has the potential to repair.
Zhejiang Petrochemical phase II & new project commissioning contribution increment
Zhejiang Petrochemical phase II: the company has a 20% stake in Zhejiang Petrochemical. In 2021, Zhejiang Petrochemical will be in full load production, contributing 4.46 billion yuan of investment income. Zhejiang Petrochemical phase II will be fully put into trial operation in January 2022, adding 20 million tons / year of oil refining, 6.6 million tons / year of aromatics and 1.4 million tons / year of ethylene capacity. Zhejiang Petrochemical is expected to bring stable investment income. Yangkou Port polyester integration project: 5 million T / a PTA and 2.4 million T / a polyester spinning. The first unit has been put into trial production and is expected to be put into operation in the first half of 2023. Tongkun Shuyang: 2.4 million T / a filament (staple fiber), 900000 T / a DTY fiber and 250000 T / a high-end fabric grey cloth. The project has been submitted for approval and started construction. Hengxiang new material: 150000 T / a surfactant and 200000 t / a textile additives. The project was put into trial production in September 2021 and is expected to run at full capacity by the end of 2022. The contribution of new projects is incremental, and the performance growth can be expected.
Risk warning: the project progress is not as expected, the price of raw materials fluctuates sharply, and the international trade policy changes
