\u3000\u3000 Jiangsu Sopo Chemical Co.Ltd(600746) (600746)
In 2021, acetic acid continued its high boom, with significant year-on-year growth in performance, maintaining the “buy” rating
According to the company’s performance forecast, the net profit attributable to the parent company is expected to be RMB 2.300-2.500 billion in 2021, with a year-on-year increase of 894.34% – 980.81%. In 2021, the prosperity of acetic acid industry remained high, and the prices of the company’s main products increased significantly year-on-year. In Q4 of 2021, the company’s acetic acid plant was shut down for maintenance, and some assets were depreciated, resulting in a month on month decline in Q4 performance. We adjusted the company’s profit forecast downward from 2021 to 2023. It is estimated that the company’s net profit attributable to the parent company from 2021 to 2023 will be RMB 2.405 (- 3.45), 2.153 (- 1.70) and 2.261 (- 09) million respectively, EPS will be RMB 206 (- 0.29), 1.84 (- 0.15) and 1.94 (- 0.00) respectively, and the corresponding PE of the current stock price is 7.2, 8.1 and 7.7 times. The company acquired Dongpu new materials to open up growth space and maintain the “buy” rating.
In 2021, Q4 company made provision for impairment loss on acetic acid plant maintenance and foaming agent assets, and its performance fell month on month
According to the company’s announcement, the company is expected to realize a net profit attributable to the parent company of RMB 14934-349340000 in Q4 of 2021. According to wind data, the average spot price of Q4 acetic acid in 2021 was 6912 yuan / ton, up 5.83% month on month. However, the company started the shutdown and maintenance of acetic acid and ethyl ester unit on November 18, 2021, and resumed production on December 18. With the decrease of price increment, the company’s main acetic acid business fell month on month. At the same time, according to the current benefits of ADC foaming agent raw powder and the company’s project development and product transformation and upgrading strategy, the company will shut down some production units of ADC foaming agent raw powder and terminate the implementation of ADC technology improvement and transformation project from November 2021, and make provision for impairment of ADC foaming agent related assets, affecting the company’s current profit and loss of 54.73 million yuan. The provision for impairment loss of acetic acid plant maintenance and foaming agent assets led to the company’s Q4 performance or month on month decline in 2021.
Acetic acid is expected to maintain a high boom in 2022, and the subsidiary Dongpu new materials opens up future growth space
From 2021 to 2022, there is little new capacity in the acetic acid industry. According to the data of Zhuo Chuang information, only Guangxi Huayi plans to put into operation 700000 tons of new acetic acid capacity in 2022. In the future, PTA, EVA and other downstream industries will still have new production capacity, which is optimistic about the long-term prosperity of acetic acid. As the leader of stock high-quality sub industry, the company may continue to benefit. According to the company’s announcement, the company acquired 100% equity of Jiangsu Dongpu new material held by Zhenjiang state holding in Q3, 2021. Dongpu new material has a production capacity of 200000 t / a ion-exchange membrane caustic soda, 600000 T / a sulfuric acid and other products, and is building a 50000 T / a chloroacetic acid project. Dongpu new material has been consolidated in Q4 in 2021, and the growth space of the company has been further opened.
Risk tip: the project construction progress is less than expected, the product price has fallen sharply, the macro-economy has declined, etc.
