Event: Hubei Yihua disclosed its 2022 semi-annual report that the company's operating income in the first half of 2022 was 11.115 billion yuan, + 18.89% compared with the same period last year; the net profit of 2022Q2 was 1.665 billion yuan, and the revenue of 2022Q2 was 5.59 billion yuan,-3.40% compared with the same period last year. + 1.19%, net profit of 1.027 billion yuan, + 100.11%, + 60.97%.
The prices of the main products are high, and the company's profits have increased substantially.
In the first half of 2022, the company's three main products urea, diammonium phosphate and PVC realized revenue of 1.847 billion yuan, 2.556 billion yuan and 3.285 billion yuan respectively, which was + 32.88%, + 28.07% and + 13.15% respectively over the same period last year.
In the first half of the year, the gross profit margins of urea, diammonium phosphate and PVC were 40%, 25.40%, 14.81%, respectively, compared with the same period last year. According to Baichuan Yingfu data, the average prices of urea, diammonium phosphate and PVC in the first half of this year were 2854.30 yuan / ton, 3652.74 yuan / ton and 8603.61 yuan / ton respectively, which were + 33.71%, + 27.95% and + 3.3% respectively compared with the same period last year. The average prices of the company's main raw materials phosphate rock, sulfur and calcium carbide in the first half of the year were 744.12 yuan / ton, 3230.51 yuan / ton and 4564.57 yuan / ton, which were + 80.65%, + 130.74% and + 7.93% respectively. In the first half of the year, the company's sales, management and financial expenses were 0.36%, 5.27% and 1.36% respectively, of which the financial expenses decreased by 1.54pct, mainly due to the reduction of interest expenses.
The self-sufficiency rate of raw materials is high and the cost advantage of main products is obvious.
The company has a gas head urea production capacity of 1.56 million tons, which is located in Xinjiang and Inner Mongolia, and has obvious gas price advantages; the company has a production capacity of 1.26 million tons of diammonium phosphate and is rich in phosphate rock resources in Hubei Province. the company has a production scale of 300000 tons of phosphate rock in the western section of Jiangjiadun mining area, and the mining license of 1.5 million tons in the eastern section is being processed. PVC's raw material calcium carbide is a kind of high energy-consuming products. Under the background of double control of energy consumption, the supply growth is limited, the company has a production capacity of 840000 tons of PVC, the subsidiary of Inner Mongolia Yihua has an annual production capacity of 600000 tons of calcium carbide, and the subsidiary of Qinghai Yihua has an annual production capacity of 450000 tons of calcium carbide, with high raw material self-sufficiency and significant cost advantages. In addition, the company also has 680000 tons of caustic soda, 100000 tons of insurance powder, 60,000 tons of pentaerythritol, 20,000 tons of TMP and 1000 tons of TPO and other products.
Layout of new chemical materials to enter the new energy track
While tamping the main business, the company continues to promote industrial transformation and upgrading. In order to speed up the technological transformation and upgrading of the company's synthetic ammonia industry, the company plans to invest 3.568 billion yuan to build a 550,000 t / an ammonia alcohol project in Tianjiahe area of Yaojiagang Chemical Industry Park in Yichang City, with the current project progress of 24%. The construction progress of the 60,000 t / a biodegradable new materials project invested by the company's wholly-owned subsidiary is 57%, which is expected to be completed and put into production by the end of the year. The company uses the 100% equity interest of Jiangjiadun Mining to increase the capital of Bang Popularization New Materials to promote the construction of 300,000 tons / year iron phosphate and 200,000 tons / year nickel sulfate projects of Bang Popularization new materials; the company plans to increase the capital of Stanley's new materials by 699 million yuan to carry out new energy materials and new fertilizers, and Stanley plans to build projects such as 40,000 tons of iron phosphate per year. The layout of new chemical materials and new energy industry chain products is expected to open up growth space for the company.
Investment suggestion: we estimate that the company's net profit from 2022 to 2024 will be RMB 2.716x211,3851 million, EPS is RMB 3.03max, RMB 3.70max, and PE is 4.51 times PE, respectively. The company will be given a "buy" rating for the first time coverage.
Risk hint: the price of chemical fertilizer fell, and the production of the new project fell short of expectations.