Event: according to the company's annual report for 2021, the company achieved an operating income of 89.3 billion yuan in 21 years, an increase of 19.5% over the same period last year, and a net profit of 2 billion yuan, up 219% over the same period last year. Among them, the company Q4 achieved revenue of 27.4 billion in a single quarter, an increase of 38.8% over the same period last year, an increase of 10.9% over the previous year, and a net profit of 35 million yuan, down 97.2% from the same period last year and 95.1% from the previous year.

Comments:

Maintenance led to a sharp decline in sales, the industry boom led to 21 years of high performance growth: 21 years of sharp rise in oil prices led to a sharp increase in the price of the company's main products compared with the same period last year. In 21 years, the average sales prices of diesel, gasoline and aviation kerosene were 5497, 7322 and 3700 yuan / ton respectively, which were + 36%, + 23% and + 34% respectively compared with the same period last year. The average prices of p-xylene, benzene, ethylene glycol and ethylene oxide were 5643, 6141, 4651 and 6778 yuan / ton respectively, which were + 41%, + 82%, + 30% and + 11% respectively. The average prices of polyethylene, polypropylene, polyester chips, acrylic and polyester were 8713, 8660, 5593, 15859 and 6322 yuan per ton, respectively, which were + 18%, + 12%, + 29%, + 47% and + 13% respectively compared with the same period last year. The company's 21-year output of diesel, gasoline and aviation kerosene was 339,340 and 1.19 million tons respectively, which was-14.9%, + 3.8% and + 5.3% respectively compared with the same period last year. The output of p-xylene, benzene, ethylene glycol and ethylene oxide was 50, 31, 15 and 340000 tons respectively, which was-25.1%,-17.6%,-36.3% and + 7.2% respectively compared with the same period last year. The output of polyethylene, polypropylene and polyester chips was 50, 46 and 320000 tons respectively, which was-14.6%,-7.5% and-0.6% respectively compared with the same period last year. In 21 years, Q2 company implemented the largest shutdown and overhaul in history, resulting in a decline in Q2 single-quarter operating rate, resulting in a sharp decline in sales of most of the company's main products. The rise in oil prices led to a sharp increase in raw material prices, and the company's main business gross profit margin fell compared with the same period last year. In 2021, the gross profit margin of petroleum products, intermediate petrochemical products, resins and plastics and synthetic fibers decreased by 1.2pct, 12.4 pct, 12.8 pct and 19.3 pct respectively compared with the same period last year.

The carbon fiber project advances steadily and continues to build carbon fiber industry clusters: carbon brazing composite has excellent performance, good downstream demand and a wide range of applications. It is expected that during the 14th five-year Plan period, carbon brazing composite will usher in a period of rapid development. The future development space is broad. In the past 21 years, the company's 1500 t / a PAN-based carbon fiber project has been successfully completed and put into production, the hydrogen fuel cell hydrogen supply center has completed trial installation, and the construction of 24,000 t / a raw filament, 12,000 t / a 48K large tow carbon fiber project and the third loop 220KV power supply line project have been accelerated. Among them, the 48K large tow project is expected to complete the first phase of 6000 ton carbon fiber production capacity by the fourth quarter of 2022, and the second phase will be completed by the end of 2024. After completion, the company will form 13500 tons of carbon brazing capacity. The company will break through the composite molding technology based on large tow carbon fiber as soon as possible, comprehensively promote the construction of technological transformation and upgrading projects, and strive to create a world-class industrial base of green energy, fine chemicals and high-end materials.

Earnings forecast, valuation and rating: taking into account the rising oil prices, the company's cost as a refining and chemical enterprise increases, so we downgrade the company's 2022-2023 profit forecast and add 2024 profit forecast. The company's net profit from 2022 to 2024 is expected to be 21.47 yuan (down 38%) / 22.97 yuan (down 35%) / 2.467 billion yuan respectively, corresponding to 0.201mm 0.210.23 yuan EPS respectively. The company's carbon fiber project is advancing steadily, and there is a broad space for future development, so it maintains the "overweight" rating of the company's A shares and H shares.

Risk hint: the risk of large fluctuations in crude oil prices, downstream demand is less than expected risk.