This report is read as follows:
Coke volume and price rise, chemical industry growth, hydrogen energy start, 2021 performance increase, in line with expectations; project production-coke sea-chemical production extension, medium-and long-term growth is outstanding.
Summary:
Downgrade profit forecast, maintain target price, "increase" rating. In 2021, the company achieved revenue of 38.43 billion (+ 94.2%) and net profit of 2.61 billion (+ 58.1%). The performance was in line with expectations, and the dividend (including the middle of the year) totaled 0.19 yuan. Due to the higher-than-expected price of raw materials, the net profit in 2022 and 2023 is adjusted to 33.8, 4.15 billion yuan (originally 39.8 and 5.09 billion yuan) and 5.51 billion yuan in 2024, taking into account the company's leading advantages and the growth brought about by continued expansion. Maintain the target price of HK $7.52 and maintain the overweight rating.
The volume and price of coke rose, chemical projects were put into production, hydrogen energy business started, and the performance increased greatly in 2021. 1) Coke sector, the company completed the acquisition of Shunri Xinze (1.2 million tons of coke production capacity and supporting chemical products) at the beginning of 2021, achieving a coke business volume of 11.05 million tons, accounting for 2.4% of the national output, and the leading position remained stable. for the whole year, the coke business achieved revenue of 15.9 billion (+ 82.4%), sales of 5.69 million tons (+ 10.8%) and average sales price of 2795 yuan / ton (+ 64.6%). Affected by the high price of coking coal, the cost per ton of coke is 2144 yuan per ton (+ 75.9%), and the gross profit is 3.7 billion (+ 50.4%). 2) the chemical sector, benefiting from the 300000 ton styrene project, the company produced 3.86 million tons of fine chemicals in 2021 (+ 4.9%), increased the stack price, realized revenue of 12.58 billion (+ 115.2%), and realized a gross profit of 1.21 billion (+ 212.7%) for the whole year. 3) New energy sector, 2021 is the first year for the company to sell hydrogen on a large scale, selling 196 million cubic meters of hydrogen for the whole year, contributing 3 million gross profits. The comprehensive cost of hydrogen production from coke oven gas is about 0.7 yuan per square meter, which is much lower than that of the mainstream hydrogen production process. the medium-and long-term plan for the development of hydrogen energy industry has been released, and the company has a broad space for hydrogen production.
Domestic production, sea Indonesia, chemical production extension, outstanding growth. 1) domestic new projects are progressing steadily, and the 3 million-ton coke project under construction in Xuyang is expected to be put into production in the second half of 2022, strengthening its leading position. 2) in response to the overseas expansion of the double carbon strategy, Indonesia invests and controls Xuyangweishan (4.8 million tons / 51%), shares in Detian Coking (4.7 million tons / 24%) and Jinxiang New Energy (3.9 million tons / 20%), with a total equity capacity of 4.36 million tons. After putting into production, not only the production capacity will be greatly increased, but also will enjoy overseas low-cost coal resources to enhance profitability. 3) after the Cangzhou caprolactam project is put into production in the second half of 2022, the total scale of caprolactam will reach 750,000 tons / year, which is expected to be the first in the country and the leading in the world, and develop downstream nylon, PS and other high-end materials to achieve the extension of the industrial chain.
Catalyst: the project under construction has been put into production, and the price difference of coal coke has widened.
Risk hint. Insufficient downstream demand; falling international oil prices; uncertainty of M & An integration.