\u3000\u3000 Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) (600426)
The performance is in line with expectations, the leading profitability is fully resilient, and the “buy” rating is maintained
According to the company’s announcement, the net profit attributable to shareholders of listed companies is expected to reach 7-7.5 billion yuan in 2021, with a year-on-year increase of + 289.32% – + 317.13%. Corresponding to Q4 single quarter, the net profit attributable to the parent company is expected to be 1.388-1.888 billion yuan, with a month on month ratio of – 23.34% – + 4.28% and a year-on-year ratio of + 173.35% – + 271.81%. The company’s successful R & D of electronic grade Dec and EMC products has helped the company develop high-end solvent racetrack. In the long term, Jingzhou base is expected to rebuild a Dezhou base, and the company can grow in the future. We maintain the profit forecast from 2021 to 2023. It is estimated that the net profit attributable to the parent company is RMB 708 million, RMB 6691 million and RMB 6953 million respectively, corresponding to EPS of RMB 3.31, RMB 3.16 and RMB 3.29 respectively. The current share price corresponds to PE of 9.3, 9.8 and 9.4 times respectively, maintaining the “buy” rating.
In 2021, the prices of most products of Q4 company increased month on month, and it is optimistic that the product prices will remain high in 2022
In Q4 of 2021, the prices of most of the company’s main products increased month on month. According to the data of Baichuan Yingfu, the average price and month on month variation range of Q4 coal and various products are 1210 (+ 32.06%), 2683 (+ 2.47%), 5815 (+ 12.96%), 14051 (- 16.09%), 6994 (+ 9.03%), dmf16202 (+ 0.39%), 12749 (+ 18.64%) yuan / ton of thermal coal, urea, ethylene glycol (- 12.96%), octanol (- 16.09%), acetic acid (+ 9.03%), adipic acid (+ 18.64%). In the later period of Q3, the coal price rose sharply, which slowed down the growth of benefits to a certain extent. However, the company actively promoted the production of new projects and timely adjusted the product structure, realizing a large improvement in business performance. At present, coal prices have begun to fall, while the prices of urea, acetic acid and adipic acid have increased. We are still optimistic that the company’s performance will remain high in 2022.
The company’s Dec and EMC have successfully developed a new energy track, and equity incentive shows the company’s development ambition
In January 2022, the company successfully developed electronic grade methyl ethyl carbonate and diethyl carbonate products. According to the Dezhou Municipal Development and Reform Commission, the company plans to invest 1.031 billion yuan to build a high-end solvent project in Dezhou park. After the unit is completed and put into operation, it will produce 300000 tons of dimethyl carbonate, 300000 tons of methyl ethyl carbonate and 50000 tons of diethyl carbonate per year. The construction is expected to be completed by the end of 2023. At the same time, Dezhou base will build and put into operation 120000 ton PBAT project and 80000 ton nylon 66 project in the future, with a growth period. At the same time, the company will implement the restricted stock incentive plan in 2021. Some unlocking conditions of phase III are: Based on the operating income in 2020, the growth rate of operating income from 2022 to 2024 will not be less than 80%, 85% and 160% respectively, fully demonstrating the company’s confidence in future development.
Risk tips: the construction progress of the project is less than expected, the product price has fallen sharply, the macro-economy has declined, etc.
