Event: on August 30, 2022, Sinochem International released the 2022 semi-annual report: the company realized operating income of 44.413 billion yuan in the first half of 2022, + 13.96% year-on-year; realized return net profit of 974 million yuan,-54.55%; realized non-return net profit of 868 million yuan, + 44.46% of the same period last year. The gross profit margin of sales was 9.79%, down 2.49% from the same period last year; the net profit rate of sales was 3.45%, down 12.56% from the same period last year; and the cash flow of operating activities was 1.384 billion yuan, an increase of 2.702 billion yuan over the same period last year. The decline in H1 net profit and net interest rate in 2022 was mainly due to the fact that the company's data for the same period last year included investment income from the sale of shares in Jiangsu Yangnong Chemical Co., Ltd., which accounted for 71% of the net profit in the same period last year and belonged to non-recurrent profit and loss items.
Among them, Q2 realized revenue of 25.569 billion yuan in 2022, + 18.92% year-on-year, + 35.69% month-on-month; realized net profit of 580 million yuan,-68.48%, + 47.26%; and deducted non-return net profit of 553 million yuan, + 122.98% year-on-year and + 75.56%. The gross profit margin of sales was 9.15%, down 1.90% from the same period last year and 1.51% from the previous year; the net sales margin was 3.47%, down 21.10% from the same period last year, and increased by 0.04% from the previous year; and the cash flow from operating activities was 2.359 billion yuan.
Comments:
In the face of the adverse effects such as the epidemic situation and the conflict between Russia and Ukraine, the company quickly adjusted its marketing strategy, actively opened up overseas markets, and optimized production scheduling in a timely manner. we will continue to promote technical reform and process optimization to ensure the stability of the supply chain, and the profits of the core business have increased significantly over the same period. 2022H1, the company's current average prices of chlorobenzene, chlor-alkali, resin products and rubber antioxidants are 10135.18, 2385.5, 23071.68 and 31214.86 yuan per ton respectively, which are + 27%, + 112%, + 1% and + 65% respectively compared with the same period last year. The revenue was 9.25,3.96,16.50 and 2.403 billion yuan respectively, which was + 11%, + 143%,-12% and + 32% respectively over the same period last year. With the gradual deepening of the transformation, the accumulation of the two core industrial units Yangnong Group and Sheng'ao Chemical continues to deepen, and the performance continues to improve. 2022H1, Yangnong Group achieved an income of 5.607 billion yuan and a net profit of 941 million yuan; Shengao Chemical achieved an income of 2.444 billion yuan and a net profit of 672 million yuan, and the two core industrial units achieved a net profit of 1.613 billion yuan in half a year, showing a vigorous momentum of development.
New chemical materials industry blossoms at many points. Hydrogen peroxide epichlorohydrin, para-aramid, PA66 and other core products have made major breakthroughs. The company is a domestic leading enterprise of epoxy resin, polymer additives and para-aramid. In the process of transformation, the company focused on the building of the core industrial chain, continued to be led by technological breakthroughs, and 2022H1 made major breakthroughs in a number of core products, which laid a solid foundation for the company to become a leading comprehensive chemical new material enterprise.
(1) the first phase of Lianyungang C3 project 150000 tons / year hydrogen peroxide ECH, 180000 tons / year epoxy resin was completed and put into production, firing the first shot of C3 production; in addition, 120000 tons / year ionic membrane caustic soda and 350000 tons / year hydrogen peroxide were completed and put into production. Among them, ECH is the first hydrogen peroxide plant in the world, which has been put into production in 2022Q1 and operated stably. The load of the production line continues to rise, and it firmly occupies the leading position of ECH in China. At present, the company has a production capacity of 250000 tons of ECH and 350000 tons of epoxy resin, ranking first in the country.
(2) para-aramid has the first production capacity of 5000 tons in the country, and made a major breakthrough in 2022H1, successfully conquered the quality problems of high-mold and high-strength products, the quality reached the international first-class level, obtained customer certification in many application fields, and sales increased rapidly, successfully transformed from "production and marketing" to "production by sales", and the company has broad prospects for the development of para-aramid in the future.
(3) in terms of engineering plastics, the company relies on the independently developed technology for the production of hexanediamine without hexanedionitrile, the layout of high-end nylon material industry, Zhongwei base 40,000t / a PA66 and 25000 t / a hexanediamine project was successfully driven in 2022Q2; relying on the advanced experience of Elix, the first phase of 24000 t / an ABS modified material project in Yizheng base started trial production in 2022Q2 and has completed samples from a number of important customers.
(4) the company is committed to building a leading comprehensive service provider of polymer additives, 2022H1 Thailand 25000 tons / year rubber antioxidant plant put into operation, 20 million tons / year high-end antioxidant TMQ completed the international layout of the additive industry and achieve further expansion of the industrial territory.
Focusing on the construction of the core industrial chain, the first phase of C3 and other major projects will be launched soon, and other projects in the first phase of C3, a leader in innovative chemical materials, such as phenol, acetone, bisphenol A, PDH and PO, are expected to be completed one after another in the second half of this year. The first phase of C3 project is about to be completed, thickening the company's performance, while laying the foundation for the development of the company's material industry. The main structure of the process equipment of Lianyungang 192000 ton accelerator project has been completed, and part of the equipment has been installed, extended chain, supplementary chain and strong chain, constantly expanding the polymer additive industry. The company insists on "science first", with 2022H1 R & D expenditure reaching 460 million yuan and CAGR reaching 39% in 4 years (excluding incomparable factors). In the future, the company will continue to focus on the construction of core industrial chains such as epoxy resin, polymer additives, para-aramid and engineering plastics, and actively cultivate the industrial chain of lithium materials and electronic chemicals to create an industrial highland of new chemical materials.
It is estimated that the company's revenue in 2022, 2023, and 2024 will be 772, 793 / 83.2 billion, respectively, and its net profit will be 14.46, 19.68 / 2.524 billion, respectively, corresponding to PE13.7/10.1/7.8 times, maintaining a "buy" rating.
Risk tips: project production schedule is lower than expected, raw material prices fluctuate sharply, chemical products market falls sharply, domestic and foreign epidemics and other force majeure, international situation turbulence, industry policy changes, and so on.