I. Overview of events
On August 30, 2021, the company issued a semi-annual performance announcement for 2021, with operating income of 17.75 billion yuan in the first half of the year, an increase of 79.1% over the same period last year, a net profit of 1.47 billion yuan, an increase of 208.9 per cent, and a non-return net profit of 1.45 billion yuan, an increase of 228.6 per cent. Of this total, 21Q2 achieved revenue of 9.05 billion yuan in a single quarter, an increase of 73.5 percent over the same period last year, and its net profit was 800 million yuan, an increase of 188.9 percent over the same period last year.
II. Analysis and judgment
High revenue growth and higher gross profit margin
Revenue side: from the point of view of business, the revenue of 2021H1's methyl ethyl ketone / maleic anhydride / chemical other / supply chain business is RMB 10.6 billion respectively, compared with the same period last year. The decline in methyl ethyl ketone business revenue is mainly due to the decline in sales volume. Gross profit margin: 2021H1's comprehensive gross profit margin was 13.95%, an increase of 3.4% over the same period last year, mainly due to the increase in the price of the company's main products; among them, the gross profit margin of methyl ethyl ketone / maleic anhydride / chemical other / supply chain business was 28.3%, 21.4%, 45.8%, 2.0%, and-4.4%, 8.9%, 28.8, 1.4%, respectively.
C4 industrial chain: consolidate the leading position of methyl ethyl ketone and maleic anhydride, layout downstream high-end, fine products consolidate the leading position of methyl ethyl ketone and maleic anhydride. The company currently has a production capacity of 180000 tons of methyl ethyl ketone, accounting for about 50% of the domestic production and marketing share; it has a plant of 200000 tons for the oxidation of n-butane to maleic anhydride, the largest in the world; compared with other smaller manufacturers of methyl ethyl ketone and maleic anhydride, the company has strong economies of scale and bargaining power. At the same time, in order to consolidate its leading position, the company plans to build a new production capacity of 200,000 tons / year of maleic anhydride to meet the growing demand downstream. Multi-directional layout of downstream high-end, fine products, deep dig C4 industry chain value. MMA: the company's 200,000 t / a MMA project has been put into production, and the PMMA project is under construction. After putting into production, the company will complete the formation of "isobutene-MMA-PMMA".
The integrated and complete industrial chain. Nylon 66: the company and China Tianchen have reached an agreement on joint investment in the construction and production of high-tech material nylon 66, initiating the establishment of Tianchen Qixiang New material and investing in the construction of a new material industrial base with an annual output of 1 million tons of nylon 66, which is currently under construction. Nitrile latex: the company invested 200,000 tons / year nitrile latex plant, which was put into production in January 2021. At present, it is the largest nitrile latex plant in China. Isononanol: the company plans to invest 200,000 tons / year isononanol project, its downstream product is DINP, mainly used in plastic plasticizer, the potential market demand reaches millions of tons.
Cut into the C3 industrial chain, layout "propane-propylene-epoxy propane" industrial chain to achieve the extension from C4 to C3, and form a perfect "propane-propylene-epoxy propane" integrated industrial chain layout.
The company actively introduces advanced technology, successively introduces the Oleflex production process of UOP in the United States, invests in the construction of 700,000 tons / year propane dehydrogenation project, introduces the hydrogen peroxide direct oxidation technology shared by Germany and ThyssenKrupp, and invests in the construction of 300,000 tons / year propylene oxide project. Up to now, the PDH project and propylene oxide project have entered the construction process and are expected to be put into production in 2022. We believe that through the layout of the C3 industrial chain, the company is expected to add new profit growth points, improve anti-risk ability, and create a comprehensive chemical platform.
III. Investment suggestions
It is estimated that the revenue of the company from 2021 to 2023 is 3.638 million yuan, the net profit is 3.98 billion, the EPS is 1.64, and the corresponding PE is 8.9, 8.1 and 7.4 times. With comparable companies Satellite Petrochemical, Donghua Energy and Wanhua Chemical 14.8 times PE in 2021 as a reference, coverage for the first time, given a "recommended" rating.
Fourth, risk tips:
The risk of rising raw material prices; the risk of slow production pace of new capacity; the risk of falling product prices.