Event description
On the evening of April 15, Sinochem International released its 2021 annual report that the company realized operating income of 80.648 billion yuan in 2021, an increase of 48.9% over the same period last year; realized net profit of 2.175 billion yuan, up 608.9% over the same period last year; realized deduction of non-net profit of 565 million yuan, an increase of 45609.01% over the same period last year, and basic earnings per share of 0.78 yuan; it is proposed to distribute a cash dividend of 0.8 yuan per 10 shares to all shareholders.
The annual performance reached an all-time high, and the profit level of new chemical materials increased significantly compared with the same period last year.
For the whole year, the company achieved a net profit of 2.175 billion yuan, an increase of 608.9% over the same period last year, and a deduction of 565 million yuan for non-net profit, an increase of 45609.01% over the same period last year. The company's annual performance reached an all-time high. During the reporting period, the company earned 1.57 billion yuan from disposing of Yang Agricultural and Chemical assets, greatly increasing this year's return net profit. After deducting this non-recurrent factor, the company's annual profit growth is still outstanding compared with the same period last year. Deducting non-net profit to achieve the best in history. 21Q4 performance showed a loss mainly due to the impairment of 352 million yuan of goodwill to the natural rubber asset group at the end of the year, resulting in an increase of 317 million yuan in asset impairment loss compared with the same period last year. If the adjustment plus return after the actual deduction of non-return net profit of about 892 million yuan, after adjustment, the contribution of 21Q4 operating profit is positive, and the annual performance has achieved substantial growth.
From the business plate split point of view, the chemical new materials plate business income and profit growth rate is the fastest. For the whole year, the operating income reached 15.65 billion yuan, an increase of 110.92% over the same period last year, and the gross profit margin increased by 6.49%. Among them, the volume and prices of products such as chlorobenzene, chlor-alkali, epoxy resin and rubber antioxidants rose, and the prosperity of the products gradually improved. Chemical materials marketing plate annual operating income of 23.04 billion yuan, an increase of 73.70% over the same period last year, lightweight marketing business brings better cash flow for the company. Strategic emerging business, as a new business segment of the company, achieved an annual operating income of 310 million yuan, an increase of 447.63% over the same period last year, and a gross profit of 40 million yuan. At the same time, ternary cathode materials also realized the entry of the core customers of the industrial chain.
From the point of view of the specific separation of the new chemical materials plate, each sub-plate has achieved a simultaneous increase in volume and price, in which chlorobenzene / chlor-alkali, epoxy resin and rubber antioxidant have obvious pulling effect on the overall profit. The revenue of basic raw material intermediates for the whole year was 4.74 billion yuan, an increase of 74.43% over the same period last year, and the gross profit margin was 31.64%, down 2.19% from the same period last year. The annual average price of chlor-alkali / chlorobenzene increased by 10.6% and 77.7%, and sales increased by-1.452% and 0.003% respectively. The annual revenue of high-performance materials reached 6.59 billion yuan, an increase of 71.07% over the same period last year, with a gross profit margin of 17.89%, an increase of 2.32% over the same period last year. The average price of epoxy resin, the core product, rose 51.3% year-on-year, and sales rose 25.05% over the same period last year.
The revenue of polymer additives for the whole year was 4.32 billion yuan, up 80.63% from the same period last year, the gross profit margin was 33.72%, up 4.57% from the same period last year, the average price of rubber antioxidant, the core product, rose 65.7% year-on-year, and sales rose 4.55% from the same period last year.
Lianyungang C 3 project has been put into production one after another, accelerating the integrated layout of the industrial chain.
The total investment of the first phase of the company's C 3 project is 13.913 billion yuan, with an annual output of 600000 tons of propane dehydrogenation (PDH), 650000 tons of phenol acetone, 240000 tons of bisphenol A, 400000 tons of epoxy propane, 150000 tons of epichlorohydrin (ECH), and 180000 tons of epoxy resin. The project will be put into production in 2022. The carbon three industry project is a key step for Sinochem International to build a whole industry chain of new materials, which will help the company to deepen the business layout of new chemical materials after it is completed and put into production. According to the plan, after the project is put into production, it is expected to achieve an average annual operating income of 11.011 billion yuan and an average annual profit of 1.715 billion yuan. The C3 project promoted by the company in Lianyungang has significant competitive advantages:
1) the advantage of the layout of lightweight raw materials: propane dehydrogenation is arranged upstream of the company's C 3 project, which is the route to obtain propylene with the shortest route, the highest yield and the cleanest production process. At the same time, it has a cost advantage over other propylene acquisition routes under non-extremely high oil prices. In addition, 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. 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.
2) the advantages of industrial chain integration and circular economy: this project has a deep synergistic effect with the company's original industrial chain. The company is the only one in China to produce propylene by propane dehydrogenation and develop "phenolketone-bisphenol A-epoxy resin" product chain. The company has a production capacity of 240000 tons of bisphenol A, 350000 tons of epoxy resin and 250000 tons of ECH. Compared with the peer non-chemical main companies, the company has the ability to fully digest the downstream, which improves the stability and flexibility of the plant operation.
3) Green process advantages: the company is the only product chain in China to produce propylene through propane dehydrogenation, comprehensive utilization of hydrogen to develop HPPO and hydrogen peroxide ECH. HPPO process and hydrogen peroxide process ECH are both green processes encouraged by the national policy, which have the advantages of green and clean, low three wastes, and meet the requirements of the national dual carbon policy.
The fixed increase plan landed to help the construction of the C 3 project, and major shareholders actively subscribed to show confidence in development. On the evening of March 25, the company issued a fixed increase plan announcement, intending to adopt the method of price inquiry. No more than 830 million shares will be issued to no more than 35 specific investors, including the company's controlling shareholder, Sinochem shares, and the amount raised shall not exceed 5 billion yuan. It is proposed to be used to invest in the first phase of the company's carbon 3 new material industry project (3.5 billion) and supplementary liquidity (1.5 billion). Previously, the company's financing is mainly debt financing, the company's asset-liability ratio of 65.62% in 2021, through this equity financing, the company's capital structure will be further optimized, the asset-liability ratio will be reduced. At the same time, the controlling shareholder Sinochem actively subscribed for the shares, demonstrating the controlling shareholder's confidence in the development of the company's C 3 project. According to the announcement, the company signed a "share subscription Agreement with effective conditions" with Sinochem on March 25, 2022. Sinochem, the company's controlling shareholder, intends to subscribe for the actual number of shares issued in the same proportion according to the proportion of shares held by the company before this issue, with a total subscription amount of no more than 2.7105 billion yuan. Before this issue, the controlling shareholder Sinochem shares held 54.21% of the company's shares. The company also announced a proposal on the formulation of the company's shareholder return plan for the next three years (2022-2024). It is planned that the cumulative distribution of profits in cash over the next three years (2022-2024) will not be less than 30 per cent of the average annual distributable profits realized in the last three years.
The company has accelerated the transformation of new materials and gradually become an important material science platform under Sinochem.
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. As the company's key projects Lianyungang carbon 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 sales of new chemical materials will gradually increase, and the company's profit stability is expected to gradually improve. In May 2021, Sinochem Group, the parent company of Sinochem International, and Sinochem Holdings Co., Ltd. (hereinafter referred to as Sinochem) jointly reorganized with Sinochem International were formally established. after the reorganization, the company has formed a fine chemical industry with new chemical materials as the core. The company is positioned as an important chemical new materials platform of Sinochem Group, with the group's "science first" as the core development concept, focusing on new markets and materials, increasing R & D investment, and promoting the layout of key domestic alternative materials such as aramid, lithium battery cathode materials and RO reverse osmosis membranes.
In the future, the company is expected to become the group's new material pipeline incubation platform, create a new material platform, and continue to enrich the layout of the new material field through endogenous epitaxy.
Investment suggestion
In 2022, the company will develop into the fast lane, and the C 3 new materials project, polymer additive project and para-aramid project are expected to contribute to the profit increment of the company. It is estimated 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%, 20.7% and 33.3% over the same period last year, and the corresponding PE is 15,12 and 9 times respectively. Cover for the first time, giving 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.