\u3000\u3000 Wanhua Chemical Group Co.Ltd(600309) (600309)
Events
On January 17, the company announced that it expected to realize a net profit attributable to the parent company of 24 billion yuan to 25.2 billion yuan in 2021, with a year-on-year increase of 139% to 151%. Among them, in the fourth quarter, the company realized a net profit attributable to the parent company of RMB 4.46-5.66 billion, down 6% – 26% month on month compared with the third quarter, basically in line with expectations.
Analysis
The price of MDI is basically stable, the price of petrochemical products has declined, and the raw material end is under pressure. According to Baichuan Yingfu, in the fourth quarter of 2021, the average price of pure MDI was 22236 yuan / ton, a month on month ratio of – 1.1%, and the average price of aggregate MDI was 20322 yuan / ton, a month on month ratio of + 2.3%. At the MDI cost side, according to wind data, the average price of thermal coal in the fourth quarter of 2021 was 940 yuan / ton, a month on month increase of + 5%, and the price of raw salt was 505 yuan / ton, a month on month increase of + 64%. In terms of petrochemical business, the prices of propylene oxide, butyl acrylate, polyethylene and styrene decreased to varying degrees compared with the third quarter, while the prices of raw materials such as propane and coal increased to varying degrees, compressing the profits of petrochemical business to a certain extent.
Wanhua’s fine chemicals business is expected to grow. According to the company’s official website, in addition to the original polyurethane business unit, petrochemical company and new materials business unit, the company has further extended the emerging technology business unit, functional chemicals business unit, high-performance polymers business unit and material solutions business unit. The products have gradually changed from traditional polyurethane products, petrochemical and basic extension materials to catalytic additives, spices, engineering plastics Degradable plastics, fully biodegradable materials, cathode battery materials and other fields. At present, at the stage of existing volume, the company has a very strong industrial foundation and financial strength, and can carry out simultaneous layout and product R & D in many fields. In addition, the company has its own strong cost control and engineering ability, and the fine chemical business can bring the company growth in the future.
Investment advice
Yantai base has completed MDI technical transformation and expansion, BC has increased production capacity, Fujian project is still advancing, and polyurethane business is still increasing; The petrochemical field will also promote the layout of Fujian base. At the same time, it is expected that fine chemical projects will gradually enter the fast lane of development in the next 1-2 years. We predict that the net profit attributable to the parent company from 2021 to 2023 will be 24.453 billion yuan, 26.578 billion yuan and 29.495 billion yuan respectively, and the EPS will be 7.79, 8.47 and 9.39 yuan respectively. The current market value corresponding to PE is 12.27x, 11.29x and 10.17x respectively, maintaining the “buy” rating.
Risk tips
Downside risk of product price and large fluctuation risk of raw material price; The progress of the new project does not meet expectations; New material R & D is less than expected risk.
