Donghua Energy (002221) Company In-depth Report: Focus on PDH Growth Expectable
Investment point 1: Although it is difficult for LPG trade to continue to increase the company’s profitability, it can ensure the safety of the company’s raw materials supply and provide the basis for the expansion of PDH and PP. The company is the largest private LPG trader in China. The company’s LPG trade volume in 2017 was about 710.10,000 tons, the trade volume increased to 1,070 pounds in 2018, and the trade volume increased significantly. In 2019, factors such as currency depreciation, LPG’s 25% tariff increase, and LPG’s trade profit increase and decrease. Although it is difficult for LPG to actually increase the company’s profit, it can guaranteeThe company’s downstream production raw material supply is safe, providing the basis for the expansion of PDH and polypropylene; Investment Point 2: After the production capacity is normal, propylene will be slightly surplus, but it will not be completely deteriorated. From the perspective of subdivided supply, 2019 andIn 2020, the new capacity will account for about 20% of the current total capacity. By measuring downstream demand, the growth rate of propylene demand will be about 7.
65%, if the formaldehyde production capacity is completely released, the propylene supply will be slightly overdone, but it will not be completely deteriorated. If the coaxial device is put into operation, the score change will appear balanced or reduced; investment point 3: the company is a high-quality PDH company, The comparatively obvious comparative advantage of various production processes of polypropylene: the company opens up the LPG (extended) -nylon-polypropylene industry chain. LPG owns proprietary PDH raw materials for its trade products, and has a first-mover advantage in cost; currentlyThe MTO / MTP plant uses methanol as its raw material, which accounts for about 10% of the average domestic production capacity. Its production cost is at the top of the cost curve. The cost of methanol production is high, providing sufficient profit margins for PDH plants. Investment point 4: crudeLimited downside, PDH profits can no longer be compressed: the starch cost of 8,000 yuan / ton corresponds to US $ 80 / barrel of crude oil, 640 yuan / ton of coal, at least US $ 600 / ton, and methanol of 2,250 yuan / ton; content / crude oil and PDH plant profitThere is a negative correlation. The decrease in the accumulation of crude oil and the PDH surplus have narrowed. However, from the perspective of the supply side of crude 武汉夜生活网 oil, Iran and Venezuela have no possibility of increasing production temporarily. Saudi Arabia still在Resolutely implement the production reduction agreement, and the gradual number in the United States continues to decline, and the supply side has no possibility of growth for the time being. Therefore, we have reduced the settlement space and limited the profit of PDH. It is difficult to reduce the profit of PDH.The second phase of Ningbo is expected to be put into production in mid-2020. The third phase of Ningbo and Maoming projects will be promoted: the company has long-term clear goals, using LPG’s trade advantages to further expand the scale of PDH and polypropylene. The existing company has a capacity of 1.26 million tons of succinic acid and80 polypropylene polypropylene capacity, Ningbo Phase II 66 PDH device and 2 sets of 40-capacity PP devices will be completed. It is expected to be put into production next year, and the company’s profitability will be further enhanced. At the same time, the company plans Ningbo Phase III and Maoming projects.Power for future growth; investment point 6: The company uses the LPG by-product power plant to vigorously develop the hydrogen energy business: the company has two sets of 66-distance PDH units, and by-products 6 each year add high-purity micron powders, which will be converted into new Ningbo devices in mid-2020It will also add 30,000 tons of high-purity and low-cost hydrogen production capacity.
As the construction and operator of the first commercial operation hydrogen refueling station in Jiangsu, Donghua Energy made full use of the natural gas resources of the by-products of the LPG deep processing project and leveraged its location advantages to deploy hydrogen refueling stations, open hydrogen transport channels, and improve the hydrogen energy supply chain.To create new strategic growth points.
The company joined the Yangtze River Delta Hydrogen Infrastructure Industry Alliance and became a vice-chairman unit. It actively participates in the construction of the Yangtze River Delta hydrogen energy industry chain and will play an important role in high-purity steam supply, research and development of natural gas storage and transportation systems, and construction of hydrogen refueling stations.At the same time, the company established a wholly-owned subsidiary, Jiangsu Donghua Hydrogen Energy Co., Ltd., responsible for the company ‘s hydrogen energy sector, compiling the company ‘s hydrogen energy development strategy, coordinating the regional layout of hydrogen refueling stations, comprehensive utilization of hydrogen energy, and research and development of storage and transportation facilities.
Investment suggestion: The company’s LPG trade guarantees the feasibility of PDH and polypropylene capacity expansion. Based on the existing capacity, the company steadily promotes Ningbo and Maoming projects and is committed to creating first-class alkane processing enterprises. The company has a bright future and has long-term and clear development.Target, we predict that the EPS in 19/20/21 will be 0.
81 and 0.
95, corresponding PE is 10.
61 and 8.
22 times, maintaining the “recommended” level.
Risk reminders: 1. The Sino-U.S. Trade conflict caused the company’s LPG trade volume to decrease significantly; 2. The polypropylene demand was less than expected; 3. The production capacity was less than expected; 4. Crude oil price changes;shift.