\u3000\u3000 North Huajin Chemical Industries Co.Ltd(000059) (000059)
Event: the company released the performance forecast for 2021. In the 21st year, the company expects to realize the net profit attributable to the parent company of RMB 820-950 million, with a year-on-year increase of 152% – 192%, and the net profit deducted from the non attributable to the parent company of RMB 800-930 million, with a year-on-year increase of 213% – 264%. Among them, Q4 is expected to realize a net profit attributable to the parent company of RMB 300-430 million in a single quarter, with a year-on-year decrease of 13% – 39% and a month on month increase of RMB 476-606 million.
Comments:
The refining and chemical industry has recovered, and its performance has increased significantly year-on-year in the past 21 years: since 21 years, the global economy has continued to recover, the downstream demand has obviously warmed up, the international oil price has continuously hit a new high, the price of the company’s main chemicals generally shows an upward trend, and the industry prosperity has been maintained at a high level. Among them, the average price of polyethylene in 21 years was 8549 yuan / ton, a year-on-year increase of + 18.5%; The average price of polypropylene was 8641 yuan / ton, a year-on-year increase of + 10.4%; The average price of diesel oil was 6543 yuan / ton, a year-on-year increase of + 21.2%; The average price of urea was 2465 yuan / ton, a year-on-year increase of + 43.6%; The average price of ABS was 15822 yuan / ton, a year-on-year increase of + 43.9%; The average price of butadiene was 1022 yuan / ton, a year-on-year increase of + 45.6%. In 2021, the company seized the favorable opportunity of the continuous rise of international oil prices driving the continuous rise of product prices in the downstream market, and maintained a good trend of production and operation through a series of measures such as optimizing product structure and developing the export market of refined oil. The company conducted a three-year routine shutdown and overhaul of petrochemical and supporting utilities production units from July 15 to September 6, 2001. This overhaul had a certain impact on the company’s performance, and the company’s 21q3 performance decreased month on month. Looking forward to 22 years, with the increase of the price and demand of main products and the completion of parking and maintenance in 21 years, the sales volume of main products in 22 years will increase year-on-year, and the simultaneous rise of volume and price is expected to drive the rapid year-on-year improvement of the company’s performance in 22 years.
Continuously benefiting from the advantages of integration, the group’s refining and chemical integration project continues to be promoted: North Huajin Chemical Industries Co.Ltd(000059) as the only petrochemical listed company under China ordnance industry group and one of China’s super large integrated petrochemical enterprises, it has obvious advantages of production scale and vertical integration. The Huajin Aramco refining and chemical integration project, in which the group company participates, continues to be promoted. The project includes 15 million T / a oil refining, 1.5 million T / a ethylene and 1.3 million T / a p-xylene units. At that time, Saudi Aramco will ensure 70% of the crude oil supply. The project is expected to be completed in 2023. After the project is put into operation, the annual sales revenue is expected to exceed 100 billion yuan. With the completion of the group’s 15 million T / a new refining and chemical base project, North Huajin Chemical Industries Co.Ltd(000059) is expected to participate in the construction of the project in due time, and the competitiveness of the company’s petrochemical and fine chemical sectors will be significantly improved.
Profit forecast, valuation and rating: considering the adverse impact of the company’s 21q3 shutdown and overhaul, provision for impairment on the performance and the time required for the capacity of subsequent main products to climb, we lowered the company’s profit forecast for 21-23 years. It is estimated that the company’s net profit from 2021 to 2023 will be 8.84 (down 41%) / 10.33 (down 42%) / 11.65 (down 42%) billion yuan respectively, The corresponding EPS is 0.55/0.65/0.73 yuan / share respectively. We continue to be optimistic about the integration advantages of the company, and the future development can be expected. In addition, the refining and chemical integration project of the Group continues to promote, and the company is expected to participate in it in due time. Therefore, we maintain the “buy” rating.
Risk tips: crude oil price fluctuation risk, raw material price fluctuation risk, new capacity launch schedule is less than expected risk, main product price fluctuation risk.
