\u3000\u3000 Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) (600426)
Event: Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) release the performance forecast for 2021. During the reporting period, the net profit attributable to the parent company is expected to reach 7 ~ 7.5 billion yuan, with a year-on-year increase of + 289 ~ 317%. The net profit attributable to the parent company in Q4 is expected to reach 1.388 ~ 1.888 billion yuan, with a year-on-year increase of + 173 ~ 272% and a month on month increase of – 23 ~ + 4%. According to the announcement, the company has successfully developed electronic grade methyl ethyl carbonate (EMC) and diethyl carbonate (DEC) pilot products recently. The production process adopts ester exchange technology. The test device has opened up the process flow, and the product quality has reached the electronic grade standard. At present, it is being further optimized.
The company’s performance meets expectations and is not afraid of short-term fluctuations at the raw material end. According to our market tracking data, the prices of main products of 21q4 company are – 4% ~ + 156% year-on-year, 33% ~ + 22% month on month, and the price difference is – 47% ~ + 143% month on month. In terms of sectors, due to the sharp fluctuation of the price of bituminous coal at the raw material end affected by the dual control policy of energy consumption and the weakening of the product demand side, the general rising market is divided, polyols are weak, acetic acid, organic amine Adipic acid and new energy sectors are relatively strong (see the following for detailed data chart). According to the announcement, although the price fluctuation of bituminous coal has a certain impact on the cost, Q4 with the launch of new capacity of caprolactam and DMC, the company accurately grasps the rapid growth of electrolyte demand in the lithium battery industry, gives full play to the advantages of low cost and flexible cogeneration, realizes the stable and efficient operation of the unit, and maintains a high level of performance. In the future, with the gradual implementation of EMC and dec technical achievements, the product structure of the new energy sector will be improved, and the coal route with cost advantage under the high demand side boom is also expected to benefit in the long term.
Jingzhou base officially laid the foundation + the high-end of the headquarters, opening the second growth curve. According to the company’s official website, the foundation of the company’s Jingzhou base project was officially laid on November 5, 2021. Compared with the headquarters, Jingzhou base also has the comprehensive advantage of cost side. In terms of market, the demand side of coal chemical products is generally distributed in the coastal areas of East China, and the space mismatch between China’s existing large coal chemical base and the market, In addition, the characteristics of the high fit between the Yangtze River economic belt and coal chemical products provide Jingzhou base with a huge market space, which can form a radiation area complementary with Dezhou base in space. With the gradual advancement of the project, Jingzhou base is expected to become the strategic fulcrum for the company to open up upward performance space in the future. As a pioneer in the high-end process of Dezhou headquarters, DMC and caprolactam nylon 6 project, the company continues to layout the new energy industry chain with higher added value, nylon 66 and degradable plastic PBAT. With the in-depth promotion of the “going global” + “high-end” strategy, the company is expected to start the second growth curve.
Investment suggestion: according to the announcement, the company’s restricted stock incentive plan in 2021 is expected to establish a long-term incentive mechanism to mobilize the enthusiasm of personnel. We expect the net profit attributable to the parent company from 2021 to 2023 to be 7.24 billion yuan, 7.34 billion yuan and 8.12 billion yuan respectively, maintaining the Buy-A investment rating.
Risk tip: the product price has fallen sharply, and the project progress is less than expected
