\u3000\u3000 Wanhua Chemical Group Co.Ltd(600309) (600309)
Key investment points
Event: the company issued a performance forecast. The company expects the net profit attributable to the parent company to be 24 billion yuan to 25.2 billion yuan in 2021, with a year-on-year increase of 139% to 151%. The corresponding net profit in the fourth quarter was 4.458 billion yuan to 5.658 billion yuan, a year-on-year increase of – 4.99% to + 20.59% and a month on month increase of – 25.84% to – 5.87%.
Comments:
Global economic recovery boosted demand and chemical product prices. According to Wande, the average price of aggregate MDI in 2021 was 19870.52 yuan / ton, a year-on-year increase of 37.45%; The average price of pure MDI was 22342.76 yuan / ton, a year-on-year increase of 25.27%. Looking forward to 2022, we are cautiously optimistic about the medium and high MDI prices. On the supply side, in 2022, there will be little new production capacity in the world, except for the 50000 tons of production expansion expected by kostron Spain. On the demand side, polyurethane building thermal insulation materials and polyurethane composite energy-saving doors and windows are expected to bring incremental space for polyurethane demand; The installed capacity of wind power continues to grow, and polyurethane materials have broad prospects to replace epoxy resin. In terms of production and sales volume, considering the ramp up of Yantai’s new capacity and BC temporary shutdown in 2021, MDI production and sales volume is expected to further increase in 2022. The environmental impact assessment of 850000 tons of polyether expansion of the company is publicized. With the improvement of the company’s propylene oxide industrial chain, the company’s Polyether integration advantages and synergy with MDI are expected to continue to strengthen.
Exports to the United States maintained a high growth, and the MDI export boom continued. According to China Customs, from January to November 2021, China’s aggregate MDI export volume was 939000 tons, with a year-on-year increase of 72.6%, and the United States remains the largest export destination; From January to November 2021, China’s net MDI export volume was 111100 tons, a year-on-year increase of 23.7%. We analyze that overseas MDI devices are generally old, and the power and supply chain system are fragile. Under the influence of extreme weather, epidemic and other factors, the probability of force majeure of overseas devices still exists. With the accelerated recovery of overseas economy represented by the United States and the energy-saving transformation of carbon reduction houses, MDI exports are expected to continue to grow at a high rate.
Reposition industrial clusters. New materials continue to extend. According to Wanhua’s official website, the company’s business positioning has been changed from the original three industrial clusters to four industrial clusters of polyurethane, petrochemical, fine chemicals and emerging materials. Set up a fine chemical Co., Ltd., focusing on fine chemicals such as bio base. According to Meishan Municipal People’s government, the project of lithium iron phosphate cathode material with an annual output of 50000 tons in Meishan high tech Zone, Sichuan Province was officially started. We believe that the company will continue to deepen the lithium battery material industry chain and build an emerging technology industry cluster based on ternary cathode and lithium iron phosphate.
Investment advice: maintain profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 25.1 billion yuan, 26.89 billion yuan and 28.78 billion yuan respectively, and the PE will be 11.9x/11.2x/10.4x respectively, maintaining the “buy” rating.
Risk warning: the price of products and raw materials fluctuates greatly; The production progress of the project does not meet the expectation; Safety and environmental protection factors.
