\u3000\u3000 Wanhua Chemical Group Co.Ltd(600309) (600309)
Event:
On January 17, 2022, Wanhua Chemical Group Co.Ltd(600309) issued the forecast of annual performance increase in 2021: the company expects to realize a net profit attributable to shareholders of listed companies of 24-25.2 billion yuan in 2021, with a year-on-year increase of 139% - 151%. Earnings per share are 7.64-8.03 yuan.
Key investment points:
Both volume and price increased, and the company's performance increased significantly
In 2021, the vaccination rate of the world's major economies continued to increase, the global economy recovered, the market demand was boosted, and the price of chemical products increased. The company's MDI technical transformation, ethylene and other new production capacity and new devices were put into operation, the volume and price of major products such as polyurethane, petrochemical and fine chemicals increased simultaneously, and the operating performance increased significantly year-on-year.
From the perspective of volume, in February 2021, the company completed the technical transformation of MDI unit in Yantai Industrial Park, and the production capacity was expanded from 600000 T / A to 1.1 million T / A; In October 2021, the company's 300000 t / a MDI unit of boside chemical company in Hungary increased to 350000 T / a through technical transformation. In 2021, Wanhua Chemical Group Co.Ltd(600309) MDI capacity will increase by 550000 tons. According to Baichuan Yingfu, the total MDI output of Shandong and Zhejiang in China was 1.6 million tons in 2021, a year-on-year increase of 33%.
From the perspective of price spread, according to wind, the average market price of aggregated MDI in 2021 was 19864.93 yuan / ton, a year-on-year increase of 37.41%; The average market price of pure MDI was 22338.90 yuan / ton, a year-on-year increase of 25.25%. The price difference between polymerized MDI and pure benzene was 13835.13 yuan / ton, with a year-on-year increase of 24.73%; The price difference between pure MDI and pure benzene was 16309.11 yuan / ton, a year-on-year increase of 12.70%. The price increase is not only for polyurethane products, but also for petrochemical and new materials products. The price trend of chemicals reflects the tension between supply and demand caused by double control of energy consumption, power and production restriction and force majeure of devices under the background of demand maintenance. This wave of industry boom cycle brought by the epidemic and environmental protection is expected to accelerate the improvement of the global market share of China's leading enterprises, and then continue to grow the competitiveness and profitability of Wanhua Chemical Group Co.Ltd(600309) and other leading enterprises.
The million ethylene project runs at a high load, and the petrochemical sector is in a business cycle
Since the large ethylene project was put into operation in November 2020, the operating load has gradually increased. It is basically in a high load state in 2021, and the output and sales of main products have increased year-on-year. From the perspective of price, according to wind, the average market price of LLDPE in 2021 is 8400.88 yuan / ton (year-on-year + 20.14%); The average market price of polypropylene is 8685.82 yuan / ton (year-on-year + 11.94%); The average market price of Vinyl PVC was 9747.32 yuan / ton (year-on-year + 40.39%). The main products of Wanhua Petrochemical sector are still in a high business cycle.
The company accelerated its expansion and continued to promote project construction
Wanhua Chemical Group Co.Ltd(600309) continue to accelerate, the project construction continues to advance, and the industrial production operates stably. The cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets in the first three quarters of 2021 reached 18.945 billion yuan, an increase of 1.552 billion yuan from 17.394 billion yuan in the first three quarters of 2020. Yantai Industrial Park successfully completed the technical transformation and capacity expansion of MDI unit in February; Ningbo Industrial Park meets the differentiated needs of customers in the most efficient way, with zero quality complaints; Hungarian BC company is active in epidemic prevention, safe, stable and high-quality operation; Fujian Industrial Park actively promotes the construction of MDI and supporting projects; In the first half of the year, while focusing on the production of modified plastics, Sichuan Meishan Industrial Park actively promoted the construction of lithium battery cathode materials and degradable plastics. According to incomplete statistics, according to the average price in 2021, if all the existing planned projects are put into operation as scheduled, it is expected that the new revenue will be 26.2 billion yuan in 2022, 59.7 billion yuan in 2023, and 157.6 billion yuan will be added after all the projects are put into operation.
Sustained R & D investment, ready to go
The company continued to adhere to R & D investment and develop processes and technologies with independent intellectual property rights. In the first three quarters of 2021, the company's R & D expenditure was 2.149 billion yuan, a year-on-year increase of 50.64%, accounting for 2% of operating revenue (a year-on-year decrease of 0.9 percentage points); Among them, Q3 R & D expenditure in 2021 was 927 million yuan, an increase of 71.22% year-on-year and 44.46% month on month; Accounting for 2.34% of the operating revenue (a year-on-year decrease of 0.62 percentage points and a month on month increase of 0.57 percentage points). In the first half of 2021, the company applied for 251 foreign invention patents and obtained 284 new invention patents.
In March 2021, Wanhua Chemical Group Co.Ltd(600309) global R & D center and headquarters base (phase I) were completed and accepted. The function of the R & D center is to develop new products, technologies and materials in the chemical industry, and provide technical and management support for the whole process of industrialization; Technological improvement of the company's existing businesses; Provide all-round technical solutions and technical support services for internal and external customers of the company. At present, the main experiments include ABS Project, PBAT project, PMMA project, basic hydrogenation catalyst project, vanillin project, transesterification PC project, isononanoic acid isononane project, citral project, BDO project, etc. of C1 technology development center, thermal safety and emergency relief project of C3 process safety & Process Development Center (unit optimization Center), kapom project of C4 emerging technology center Pu synthesis project, PA synthesis project, building materials project, nursing chemistry project, textile synthetic leather project, adhesive project, additive development project, etc., and the analysis laboratory of C5 analysis and testing center. With the continuous increase of investment in Wanhua Chemical Group Co.Ltd(600309) R & D and the continuous increase of R & D efforts of high-end chemicals, the company will continue to move towards the global leader in new materials.
Profit forecast and investment rating: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 25.003 billion yuan, 26.637 billion yuan and 28.490 billion yuan respectively, corresponding to PE 13, 12 and 11 respectively, maintaining the "buy" rating.
Risk warning: economic downturn; The project construction is not as expected; The market fluctuates greatly; New products are not as expected; Environmental protection and safety production; Competition in the same industry has intensified.
