\u3000\u3000 Zhejiang Sanmei Chemical Industry Co.Ltd(603379) (603379)
Key elements of the report:
On the evening of January 21, Zhejiang Sanmei Chemical Industry Co.Ltd(603379) released the annual performance forecast for 2021. In 2021, the company is expected to realize the net profit attributable to the shareholders of the listed company of 470-580 million yuan, with a year-on-year increase of 111.86% – 161.44%, and the deducted non net profit attributable to the shareholders of the listed company of 420-530 million yuan, with a year-on-year increase of 176.25% – 248.60%.
Key investment points:
Refrigerant profitability has improved significantly, R142b price is strong, and Q4 performance is in line with expectations: Quarterly, the company is expected to realize a net profit attributable to the parent company of 227-337 million yuan in the fourth quarter, with a year-on-year increase of 2422.2% – 3644.4% and a month-on-month increase of 124.75% – 233.66%. The company’s Q4 performance is consistent with the trend we previously predicted. The main reasons for the significant growth of performance can be attributed to the following two aspects.
The price of HFCS refrigerant reversed from the bottom in the second half of 2021, and the profit of main business improved: according to the calculation of Baichuan Yingfu data, the average price of R134a in 2021 was about 30500 yuan / ton, an increase of about 27.00% year-on-year, and the average price difference of R134a trichloroethylene was 15400 yuan / ton, a decrease of 10.38% year-on-year. However, quarterly, the price difference of q2-q4 R134a trichloroethylene in 2021 improved quarter by quarter, Among them, the average price of Q4 price difference was about 18600 yuan / ton, with a month on month increase of 31.58% and a year-on-year increase of 16.67%; In 2021, the average price of R32 was about 14600 yuan / ton, with a year-on-year increase of about 17.87%. The average price difference of R32 dichloromethane was 6528 yuan / ton, with a year-on-year decrease of 15.81%. Quarterly, the price difference of q2-q4 R32 dichloromethane improved quarter by quarter in 2021, of which the average price difference of Q4 was about 7936 yuan / ton, with a month-on-month increase of 39.86% and a year-on-year increase of 29.61%; In 2021, the average price of R125 is about 35300 yuan / ton, with a year-on-year increase of about 117.32%. The average price difference of R125 tetrachloroethylene is about 18600 yuan / ton. The year-on-year increase was about 80.43%, of which the average price of Q4 spread was about 28800 yuan / ton, with a month on month increase of 64.44% and a year-on-year increase of 153.78%. It can be seen that the price and profitability of the company’s existing mainstream refrigerant products have been significantly improved in the fourth quarter, which has a certain positive impact on the company’s comprehensive performance.
PVDF raw material R142b is in short supply, and the price is high: benefiting from the rapid development of the downstream lithium battery industry, the demand for PVDF and its raw material R142b, which can be used as the binder of cathode materials, has exploded. Under the background of the imbalance between supply and demand of product structure, the price of R142b has increased significantly, and there is no sign of high loosening. As of December 31, 2021, The mainstream price of R142b market reached 185000 yuan / ton, an increase of 560.71% over the beginning of the year, while its production cost was less than 30000 yuan. The company has a production capacity of more than 4000 tons of R142b, which can be used as PVDF raw materials for export. Therefore, it has fully benefited from the current round of R142b price rise, which has significantly boosted the company’s performance. Considering that R142b belongs to HCFCs, its production, sales and expansion are strictly limited under the constraints of Montreal Protocol. Even if some enterprises have plans to build R142b production lines for supporting raw materials of downstream products, R142b produced by them can not be used for export, and it still takes time for the new capacity to be put into operation, Therefore, we believe that R142b’s short supply situation is difficult to improve in the short term, and its price will continue to operate at a high level, which will benefit the company’s performance in 2022. According to the data of Baichuan Yingfu, the market price of R142b has been raised again recently. As of January 21, the quotation was 190000 yuan / ton, an increase of 5000 yuan / ton over the beginning of the year.
The price of refrigerant retreated for a short time and is still optimistic about the future performance of the company: with the cancellation of the impact of power and production restriction and the short weakness of foreign trade demand near the Spring Festival, the price of refrigerant and its raw material methane chloride has fallen overall recently. As of January 23, the price of high-end R134a in Zhejiang was 29000 yuan / ton, The price difference of R134a trichloroethylene was 18100 yuan / ton, 43.14% higher than the high of 51000 yuan / ton last year; R32 price is 16000 yuan / ton, 27.27% higher than the high of 22000 yuan / ton last year, and R32 dichloromethane price difference is 6701 yuan / ton; The price of R125 was 37000 yuan / ton, 35.09% higher than the previous year’s high of 57000 yuan / ton, and the price difference of R125 tetrachloroethylene was 23400 yuan / ton. It can be seen that despite the decline in the price of refrigerants, the price difference between various refrigerants and their methane chloride raw materials remains above the average price in 2021. In the short term, the downstream replenishment season of refrigerants will enter one after another after the year. With the increase of demand, the price of refrigerants will rise again. In the long run, 2022 is the end of the baseline year of the third generation refrigerants (HFCS). The mainstream HFCS are listed in the notice on strictly controlling the first batch of hydrofluorocarbon chemical production and construction projects jointly issued by the Ministry of ecology and environment, the Ministry of industry and information technology and other departments. The issuance of the notice fully reflects the determination of government departments to strictly implement the Kigali amendment, Subsequently, as the demand for second-generation refrigerants continues to shift to third-generation refrigerants, under the background of strict control over the production and sales of third-generation refrigerants, it is unlikely that the price of mainstream HFCS will fall back to the bottom range from 2020 to the first half of 2021, and its price should rise step by step with the gradual reduction of product supply, Therefore, we are optimistic about the follow-up performance of the company’s main business for a long time.
Profit forecast and investment suggestions: it is estimated that the operating revenue of the company’s existing main business from 2021 to 2023 will be RMB 5.024/6.071/6.847 billion, EPS will be 0.91/1.42/2.35, and the corresponding P / E will be 21.92/14.11/8.51 respectively (corresponding to the closing price of RMB 20.00 on January 21). Maintain the “buy” rating.
Risk factors: affected by energy consumption control, the operating rate of refrigerant is lower than the expected risk, the downstream demand and export demand of products are lower than the expected risk, the price trend of refrigerant is lower than the expected risk, and the price of raw materials fluctuates sharply.
