Ethylene cracking by-product C5/C9 comprehensive utilization project: the company takes the subsidiary Derong Chemical as the platform and cooperates with Zhejiang Petrochemical to develop the field of comprehensive utilization of ethylene cracking by-products. Zhejiang Sinopec invested 4000 million tons / year refining and chemical integration project in Yushan Island Green Petrochemical Base, Daishan County, Zhoushan City. The main purpose of the project is to build crude oil terminals, warehousing, transportation, oil refining / chemical production, processing, product transportation and service facilities. After Zhejiang Petrochemical Refining and Chemical Integration Project is completed and put into production, the cracking C5 and C9 by-product resources are rich in isoprene, cyclopentadiene, cyclopentane, m-pentadiene and so on, which can be converted into a series of high value-added derivatives after processing. In the first half of the year, the first batch of Derong chemical plant was successfully put into trial operation, and the C _ 5 separation # 2 plant, C _ 5 hydrogenation # 2 plant and m-pentyl resin # 1 line were successfully put into trial operation. The trial production of the project will further improve the company's petroleum fine chemicals industry chain, so that the company's competitive advantage and overall strength will be continuously enhanced, which has important strategic significance for the realization of the company's sustainable development goal.

The company announced on July 20, 2022 that it intends to invest in the textile auxiliaries construction project with an annual output of 100000 tons. The main purpose of the project is to build an annual output of 100000 tons of textile printing and dyeing auxiliaries, mainly to invest in the production of textile printing and dyeing auxiliaries and industrial and civil new materials. It is estimated that the total investment amount of the project in the future will be 100 million US dollars, which will be solved by the company's own funds, and the specific funds will be invested in stages according to the implementation schedule of the project. Project implementation progress and construction cycle: the project was in the planning stage when the announcement was issued, and the project construction period is expected to be 24 months. The business of Jiaxing Akiren Company, a subsidiary of the company, is developing rapidly, but it is unable to carry out large-scale upgrading and transformation in the chemical park, which restricts the rapid development of the enterprise. Through the integration of internal resources, the company will gradually build a high-level professional waterproofing platform through this project, and make use of the company's advanced technology level and market leading position in the field of waterproofing to further open up the market field of functional textile chemicals and lead the development of the industry.

The company announced on October 14, 2022 that the company has signed a partnership agreement to participate in the establishment of an investment fund. The company has signed partnership agreements with investors such as Suzhou Tianhui Venture Capital Partnership (Limited Partnership) and Suzhou Nanwei Technology Co., Ltd., and the total contribution of the partnership is not less than 150 million yuan (including 150 million yuan). Among them, the company subscribed capital contribution of 30 million yuan, accounting for 19.93%. Suzhou Tianhui Microsphere Venture Capital Partnership (Limited Partnership) has completed the industrial and commercial registration procedures. The fund invests in key technologies and projects upstream and downstream of nano-microspheres, and its applications in diagnosis, chromatographic analysis, cell therapy, drug research and development and drug delivery, optoelectronics, food safety testing, environmental monitoring and other subdivided areas of excellent early projects.

Profit forecast. We estimate that the net profit in 2022-24 is 1.44,1.72 and 207 million yuan respectively, and the EPS in 2022-2024 is 0.30,0.36,0.43 yuan per share respectively. The company's future new project production growth is relatively fast, we believe that the reasonable valuation range of 2022 PE 26-29 times, the reasonable value range of 7.80-8.70 yuan, maintaining the "better than the market" rating.

Risk tips: raw material price fluctuation risk; new business development risk; safety and environmental protection risk.