2021-10-30 Open Source Securities Co., Ltd. Zhang Xucheng studied Baofeng Energy and issued a research report "three Quarterly Review report: high Coal Price Q3 performance contraction, Coal Price Down-Project production to meet the inflection Point". This report gives a buy rating to Baofeng Energy, the current share price is 14.6 yuan.
Baofeng Energy (600989)
The high coal price Q3 performance shrinks, the coal price goes down-the project is put into production to meet the inflection point. Maintain a "buy" rating
According to the company's three-quarter report, the revenue in the first three quarters of 2021 was 16.2 billion yuan, + 43.3% compared with the same period last year; the net profit of returning to the mother was 5.32 billion yuan, compared with the same period of last year; the revenue of + 68.7% and + 4.37% of Q3 was 5.73 billion yuan; and the net profit of returning to the mother was 1.58 billion yuan, compared with-21.3%. According to the progress of the new project and the price changes of products and raw materials, we adjust our profit forecast. It is estimated that the net profit of homing in 2021-2023 will be 71.7 pound 85.2cm 110.2 yuan (the previous value is 70.7pm 87.0pm 1391 million), an increase of 55.1% 18.8% and 29.3% respectively. The EPS score is 0.98 / 1.16 / 1.50 (the previous value is 0.89 / 1.10 / 2.21). Corresponding to the current stock price PE of 14.9, 12.6 and 9.7 times respectively, the company benefits from the rational coal price and the new projects are put into production one after another, maintaining the "buy" rating.
Methanol is completely self-sufficient to reduce costs, and the rising prices of products and raw materials cause performance to rise first and then suppress.
Cost reduction and product price increases led to a big increase in year-on-year performance: in the first three quarters, the prices of polyethylene and polypropylene rose 19.3% and 11.2% respectively compared with the same period last year, and the price of gasified raw coal increased by 72.85%. However, the 2.2 million tons / year methanol project of the IPO project was put into production in June 2020, resulting in a methanol self-sufficiency rate of 100% in the MTO link and a substantial reduction in cost. The prices of coke and coking clean coal rose 71.6% and 73.6% respectively compared with the same period last year, and the price difference rose 66% year-on-year (from 289 yuan / ton to 480 yuan / ton). In addition, the sales of coke, polyethylene and polypropylene rose 1.8%, 7% and-10% respectively compared with the same period last year, of which polypropylene was converted to monomer propylene due to plant maintenance, so the decline in sales had little impact on profits. The rapid rise in costs has led to a big drop in Q3 performance: in the single quarter of Q3, the prices of coke and coking clean coal increased by 34% and 51% respectively, and the price difference decreased by 2.8% (from 521 yuan / ton to 506 yuan / ton). The prices of polyethylene and polypropylene were basically the same, but the price of gasified raw coal rose 28% month-on-month, and the price difference decreased by 18.6% (the absolute value decreased by about 800 yuan / ton). In addition, coke sales dropped 16.3% month-on-month, mainly due to Q2 overselling inventory, polyethylene sales down 3% month-on-month, and polypropylene sales up 22% month-on-month.
The orderly promotion of the new project is expected to contribute to performance growth, and the green hydrogen project is in line with the carbon neutral policy.
Ningdong Phase III Olefins: 500000 tons of coal-to-olefin and 500000 tons of C2-C5 comprehensive utilization project are expected to be put into production by the end of 2022, and the 250000 tons of EVA project is expected to be put into production in the first half of 2023. Ningdong Phase IV: the 500000-ton coal-to-olefin project is still in the pre-EIA publicity stage. Olefin project in Inner Mongolia: 4 million tons of coal-to-olefin project, of which 2.6 million tons are waiting for the specific EIA targets of the national "1mm N" double carbon policy. It is expected that construction will be approved by the EIA in the first half of 2022, and 1.4 million tons have been approved by the Ordos municipal government. Ningdong Coke Project: 3 million tons of coke project is expected to be completed and put into production by the end of 2021. Green hydrogen project: annual output of 240 million standard square "green hydrogen", which is scheduled to be completed and put into production by the end of 2021, which can reduce the consumption of coal resources by about 380000 tons, reduce carbon dioxide emissions by about 660000 tons, and reduce total carbon emissions by 5 percent.
Risk tips: product price decline risk, raw material price rise risk, new project lower than expected risk.
A total of 24 agencies have rated the stock in the last 90 days, including 21 buy ratings and 3 overweight ratings; the average institutional target price in the past 90 days is 21.47; according to Securities Star valuation analysis tool, Baofeng Energy (600989) good company has a rating of 4 stars, a good price rating of 3 stars and a comprehensive valuation rating of 3.5 stars.