Event description
The company disclosed its report for the first quarter of 2022 that its operating income was 10.694 billion yuan, an increase of 37.88% over the same period last year; its net profit was 284 million yuan, a decrease of 45.12% over the same period last year; and the net cash flow generated by operating activities was-2.66 billion yuan, a decrease of 128.08% over the same period last year.
Event comment
The supply and demand of domestic refined oil is tightening, and aviation coal has the greatest potential for recovery. in the long run, the refining energy structure has been continuously optimized and the production capacity has been accelerated on a large scale. Due to the impact of the epidemic, the intensification of global trade frictions, the slowdown of domestic economic growth and the impact of the rapid development of new energy vehicles, the demand for oil products is weak; as the epidemic gradually alleviates, the demand for oil products begins to recover strongly. At the same time, with the normalization of economic activities in the future, the demand for aviation coal, which has been suppressed for a long time, will erupt strongly. Since the implementation of the relevant policies of carbon neutralization, the optimization of refining energy has been further strengthened, especially in Shandong area, the elimination speed of local refining capacity has been accelerated, the structural adjustment of refining energy has been obvious, and it has been continuously changing to large-scale, intensive, high-end and clean. In 2021, the company processed 7.7 million tons of crude oil in the whole year, the A-class operation of oil refining and ethylene reached 1103 days and 1081 days respectively, the ethylene cracking furnace ran continuously for 126 days, and the bulk ABS production load was 99.68%, which reached the best level in history. Diene yield and comprehensive energy consumption of ethylene achieved good results.
Although the oil price center has increased significantly and the cost side pressure is high in 2022, the company's petrochemical business accounts for a relatively high proportion of oil products, and diesel, aviation coal and asphalt are expected to maintain a high level of prosperity.
Layout of asphalt / lubricating oil comprehensive utilization industry chain. In 2021, the output of major products such as asphalt and base oil of Beili Company, a subsidiary of the company, reached 2.21 million tons, an increase of 150000 tons over the same period last year. The company strengthens and enlarges naphthenic base lube base oil, optimizes and makes refined lubricating oil, extends industrial chain deeply, constantly optimizes and adjusts industrial product structure, builds naphthenic resource comprehensive deep processing industrial base of characteristic lubricating oil-high-grade road asphalt-new chemical material, and gradually forms a diversified industrial pattern dominated by asphalt, lubricating oil base oil, finished lubricating oil, fine products and so on. To specialize, characteristic, high-end, differentiation, fine development, to create asphalt / lubricating oil plate "upgrade version".
Urea scene demeanor is high, the company airhead route cost advantage is significant. In 2021, Xinjiang Chemical Fertilizer Petrochina Company Limited Gas Pipeline Project was completed and put into operation. Jintianhua synthetic ammonia Plant, a wholly owned subsidiary of the company, has been built for more than 500days for the first time, and the two major chemical fertilizers of the company have produced a total of 1.38 million tons of urea. Operating performance reached the best level in history. The net profit of Jintianhua in 2021 was 260 million yuan, a year-on-year increase of 291.1%. The average market price of urea in northeast China was 2802 yuan / ton, an increase of 37.1% over the same period last year. It is expected that the market will remain high in 2022.
Multi-plate large-scale chemical platform, focusing on petrochemical, chemical fertilizer, asphalt / lubricating oil three pillar industries. The company has three production bases of Panjin in Liaoning, Huludao and Kuqa in Xinjiang, and large-scale chemical enterprises operated by many sectors. it has formed an annual production capacity of 8.3 million tons of crude oil processing, 500000 tons of ethylene, 800000 tons of polymerized resin, 1 million tons of road asphalt, 900000 tons of lube base oil and 1.32 million tons of urea, which is the platform for the weapons Industry Group to develop the petrochemical industry.
As one of the leading domestic refining and chemical integration companies, without considering future equity changes, the company is expected to make a net profit of 1.17 billion yuan, 1.26 billion yuan and 1.36 billion yuan from 2022 to 2024, corresponding to a closing price of 8.0x, 7.3x and 6.8x on April 26, 2022, respectively, maintaining a "buy" rating.
Risk hint
1. Oil prices fluctuate greatly
2. the growth rate of downstream demand is not as fast as expected.