Event description
On the afternoon of July 14, Sinochem International issued a half-year performance forecast for 2022. In the first half of 2022, the company is expected to achieve a net profit of 879 million 1.055 billion yuan, a decrease of 50.97% and 59.14% over the same period last year, and a deduction of 786% to 943 million yuan in non-net profit, an increase of 29.18% to 55.01% over the same period last year, and basic earnings per share of 0.78 yuan.
Q2 deduction non-performance increased significantly compared with the same period last year, mainly due to the rise in the volume and price of the company's main products.
The company's 2022Q2 is expected to achieve a net profit of 485% to 660 million yuan in a single quarter, a decrease of 64.12% to 73.67%, an increase of 23.01% to 67.62%; deducting non-net profit of 4.71% to 628 million yuan, an increase of 84.20%, 145.71% and 99.26%, respectively. The pre-decrease in performance in the first half of 2022 is mainly due to the fact that the investment income generated by the company's sale of Yangnong Chemical in the same period last year accounted for 71% of the net profit of the first half of 2021, which is a non-operating profit and loss project. The actual profit of the company is reflected by deducting non-net profit, and the non-net profit deducted by 22Q2 has greatly increased compared with the same period last year. The main driving force of the company's performance growth comes from both volume and price.
In terms of volume, the new 150,000 tons / year epichlorohydrin, 650,000 tons / year phenol acetone and 240,000 tons / year bisphenol An are expected to be put into production to contribute profits in Q2. In terms of price, the prices of rubber antioxidants, epoxy resin and caustic soda products maintained a high demeanor, while the prices of some raw materials decreased to a certain extent compared with the first quarter. The price difference of the company's core product caustic soda is obviously repaired compared with the first quarter. According to our monitoring of the price difference of the company's main products, the price of 2022Q2 caustic soda / raw salt is 1319.41max 479.75 yuan / ton, with a month-on-month ratio of + 13.76% Mather 9.48%; the price difference between caustic soda and raw salt is 597.71 yuan / ton, an increase of 66.25% over the previous month, mainly due to the decrease in the price of raw material salt and the increase in the price of caustic soda products. Antioxidant is the core product of Sheng'ao Chemical, the company's holding company. Q2 in 2022, the price of rubber antioxidant 6PPD was 42763.13 yuan / ton, a sharp increase of 42.42% over the same period last year and a slight decrease of 5.45% compared with the previous year. In terms of price difference, the price difference of 6PPD-aniline-MIBK is 32326.43 yuan / ton, and the year-on-year / month-on-month ratio is + 129.62% Lue 5.13% respectively. The price of raw materials decreased slightly, with aniline / MIBK ratio of-5.95% to 6.74%. The price difference of another core product, epoxy resin, narrowed compared with the previous quarter. The price of 2022Q2 epoxy resin was 25130.00 yuan / ton, down 8.19% from the previous quarter, and the price difference of epoxy resin-epichlorohydrin-bisphenol A-caustic soda was 3953.38 yuan / ton, down 19.17% from the previous quarter, mainly due to a significant drop in the price of epoxy resin. The price difference of epichlorohydrin-propylene-liquid chlorine is relatively stable, and the price difference of bisphenol A-phenol-acetone is 5385.22 yuan / ton, a month-on-month decrease of-21.95%, mainly due to the decrease in the price of bisphenol A. The company produces epichlorohydrin, bisphenol An and caustic soda, which can significantly increase the cost control ability.
Lianyungang C 3 project is about to be put into production and is expected to gradually contribute to the performance increment.
The company has a total investment of 13.913 billion yuan in the first phase of the Lianyungang C 3 project, with an annual production capacity of 600000 tons of propane dehydrogenation (PDH), 650000 tons of phenol acetone, 240000 tons of bisphenol A, 400000 tons of epichlorohydrin, 150000 tons of epichlorohydrin (ECH) and 180000 tons of epichlorohydrin. The project will be put into production in the second half of 2022. The company's C 3 project upstream layout of propane dehydrogenation, and the use of national policy to encourage the green process HPPO method, comprehensive use of propane dehydrogenation by-product hydrogen supporting hydrogen peroxide process epichlorohydrin, in line with the national dual carbon policy requirements. In the purchase of propane, the company can take advantage of its traditional bulk trade and credit advantages to obtain stable and cheap propane resources. In the layout of products, the company also has differentiation, is the only use of propane dehydrogenation to produce propylene and the development of "phenolic ketone-bisphenol A-epoxy resin" product chain. The company now has a production capacity of 240000 tons of bisphenol A, 350000 tons of epoxy resin and 250000 tons of epichlorohydrin. After the completion of the C 3 project, the company's epichlorohydrin, bisphenol An and other devices can fully meet the raw material demand of the original and new production capacity, have the ability to resist raw material fluctuations and enhance the stability of the supply chain and smooth periodicity.
The company accelerates the transformation from trade to fine chemicals and creates a new Sinochem new material platform enterprise.
In recent years, the company has accelerated the adjustment of strategic direction, gradually transformed from traditional trade business to fine chemical production platform, and created innovative new chemical materials enterprises driven by science and technology. The company is positioned as an important chemical new material platform of Sinochem Group, promoting the layout of domestic key alternative materials such as para-aramid, lithium battery cathode materials, RO reverse osmosis membrane, etc., the company is expected to become the group's new material pipeline incubation platform.
A major breakthrough has been made in the nylon 66 and intermediate J project. On April 14, 2022, Sinochem International announced that the project with an annual production capacity of 40,000 tons of nylon 66 and 25000 tons of intermediate J with an investment of 978 million yuan has been fully completed. The innovative production process adopted in this project directly prepares hexanediamine through two-step reaction, bypassing the long-term monopoly of multinational corporations on the technology and supply of adiponitrile, the key raw material of nylon 66. The breakthrough in this technology also shows the phased achievements made by the company in continuously strengthening the research and development of new materials.
Lianyungang carbon three Industry Project helps the company transform from trade to fine chemical manufacturing enterprises. The Lianyungang carbon three industry project, which will be put into production by the end of 2022, is a key step for Sinochem International to build a whole industry chain of new materials, and it is also a key measure for the company to transform from a trade enterprise to a manufacturing enterprise. after completion and commissioning, it will help the company to deepen the layout of new chemical materials business. In the next 1-2 years, as the company's key projects Lianyungang C 3 Fine Chemical Industry Park project, polymer additive project and ABS project have been put into production, the company's business structure will continue to be optimized, the proportion of trade income will continue to decline, the proportion of production and marketing of new chemical materials will gradually increase, and profit stability is expected to gradually improve.
Investment suggestion
In the second half of 2022, the C3 new material project, polymer additive project and para-aramid project are expected to contribute to the profit increment of the company. We estimate that the company's net profit from 2022 to 2024 will be 14.96,18.05 and 2.407 billion yuan respectively, an increase of-31.2%, 20.6% and 33.4% over the same period last year, and the corresponding PE will be 15,12 and 9 times respectively. Maintain a "buy" rating.
Risk hint
(1) risks caused by price fluctuations of raw materials and main products; (2) risk of production safety
(3) Environmental protection risk
(4) the progress of project production is not as expected.