\u3000\u3000 Ningxia Baofeng Energy Group Co.Ltd(600989) (600989)
Conclusions and suggestions:
Event: the company released the performance forecast for 21 years. It is expected to realize the net profit attributable to the parent company of RMB 6.800-7.200 billion, yoy + 47% – 56%, deducting the net profit not attributable to the parent company of RMB 7.075-7.475 billion, yoy + 46-54%. In Q4, the net profit attributable to the parent company is expected to be RMB 1.482-1.882 billion in a single quarter, yoy + 1-28%, qoq-6% – + 19%, deducting the net profit not attributable to the parent company to be RMB 1.547-1.947 billion, yoy + 1% – 28%, qoq-7% – + 17%, and the performance is in line with expectations. The company is a leading olefin enterprise in China, with obvious cost advantages and leading technical level. It has arranged the hydrogen energy industry in advance, and the carbon emission reduction measures have come into effect. In the future, it will move towards a higher quality green development road and be rated as “buy”.
The price of main products increased and the company’s profit increased: in 2021, the price of the company’s main products increased significantly year-on-year. The average prices of PE, PP, coke, pure benzene, asphalt and MTBE were 8753 yuan / ton, 8793 yuan / ton, 2818 yuan / ton, 7057 yuan / ton, 4785 yuan / ton and 5505 yuan / ton respectively, yoy 19%, 12%, 89%, 81% and 49% respectively. The company’s profitability was improved. In addition, the company’s industrial chain has been continuously improved, with more obvious integration advantages, which has effectively alleviated the impact of the sharp rise in raw coal prices during the year.
There are abundant projects under construction, and the integrated layout deepens the cost moat: the company arranges in advance, there are abundant projects under construction, and the subsequent 3 million T / a coal coking polygeneration project is expected to release capacity in 2022; The 500000 T / a coal to olefin and 500000 T / a C2-C5 comprehensive utilization to olefin projects in Ningdong phase III are progressing steadily, including 250000 T / a EVA unit. The methanol and olefin project is planned to be completed by the end of 2022, and the EVA unit will be completed and put into operation in 2023. Ningdong phase IV also plans to produce 250000 t EVA energy; Inner Mongolia 4 × The 1 million T / a coal to olefin demonstration project is accelerating the EIA approval, and the construction is expected to be completed in 2023. The industrial chain layout of the company is closely connected, and the products of the previous unit directly become the raw materials of the next unit, which effectively ensures the stable supply of raw materials and the full load operation of production. Multi sector coordinated development, effectively reduce production costs and deepen the cost moat.
Increase investment in hydrogen energy to ensure long-term growth: the company has arranged the hydrogen energy industry, deepened the integration of hydrogen energy and the company’s circular economy industrial chain, and the national Cecep Solar Energy Co.Ltd(000591) electrolytic hydrogen production, energy storage and application demonstration project has been completed. The project adopts a high-efficiency alkaline electrolytic cell hydrogen production equipment with a single capacity of 1000 standard m3 / h, and is equipped with corresponding hydrogen compression and storage equipment, which can produce 240 million standard m3 “green hydrogen” and 120 million standard m3 “green oxygen” per year. The “green hydrogen” and “green oxygen” produced by the project will be directly supplied to chemical plants to replace raw coal and fuel coal for hydrogen and oxygen production. It can increase and reduce the consumption of coal resources by about 380000 tons per year, increase and reduce the carbon dioxide emission by about 660000 tons per year, and increase and reduce 5% of the total carbon emission of chemical plants per year. In addition, the company also plans to put 30-40 electrolytic cell hydrogen production equipment into operation every year from 2022, with an annual green hydrogen output of about 300 million m3. The layout of hydrogen energy industry of the company will effectively solve the process emission problem of coal chemical industry and realize “carbon neutralization” in the real sense.
Profit forecast: the company is expected to realize a net profit of RMB 7.05/84.7/11.62 billion in 2021 / 2022 / 2023, yoy + 52% / + 20% + 37%, equivalent to EPS of RMB 0.96/1.16/1.58. At present, the PE corresponding to the A-share price is 17 / 14 / 10 times. The company has obvious cost advantages and rich follow-up projects. It is optimistic about its future growth prospects and maintains the “buy” rating.
Risk tips: 1. The product price is lower than expected; 2. The new project is not put into operation as expected.
