Satellite Chemical: The performance in the first half of the year is very resilient, and the price difference is expected to be repaired in the second half of the year

On the evening of July 14, Satellite Chemical disclosed the 2022 semi-annual report performance forecast.
In the first half of 2022, the company achieved a net profit of 2.
771 billion to 3.
221 billion yuan attributable to the parent, a year-on-year increase of 30.
37% to 51.
54%; and realized a deducted non-net profit of 2.
719 to 3.
169 billion yuan.
, a year-on-year increase of 33.
96%~56.
12%
.
Basic earnings per share are 1.
15~1.
34 yuan
.

The performance in the second quarter increased year-on-year and was stable month-on-month, and the bottom of the company's performance may have appeared

According to the performance forecast, the company expects to achieve a net profit of 1.
250-1.
700 billion yuan attributable to the parent in Q2, a year-on-year change of -8.
02% to +25.
09% and a month-on-month change of -17.
83% to +11.
76%.
An increase of -11.
14%~+22.
76%, a month-on-month change of -23.
39%~+5.
84%
.

The dual pressure of ethane cracking raw materials and demand has gradually eased, and the current price difference has reached the bottom
.
In 22Q2, oil prices remained at a relatively high level.
Short-term conflicts brought about an increase in global energy prices.
The price of ethane also rose due to the violent fluctuations in natural gas.
In 22Q2, the price of natural gas led to an increase of 29.
61% month-on-month.
In addition, the downstream demand for ethylene was sluggish due to the impact of the epidemic.
In 22Q2, the ethylene-ethane spread decreased by 32.
02% month-on-month, and the spread bottomed out
.
From the comparison of upstream routes, the prices of crude oil, natural gas, and naphtha in 22Q2 increased by 14.
53%, 60.
29%, and 4.
04% month-on-month; The cracking route is relatively under pressure
.

Looking ahead, we believe the current spread is unsustainable
.
First of all, there is no shortage of ethane or even a large surplus.
It is only due to the re-injection characteristics of ethane in the United States that it will have a calorific value conversion effect with natural gas.
This feature is reflected in this increase.
It is not determined by supply and demand.
Return to rationality; secondly, the price of ethane has reached a historical high since 2013.
Under the current price, the profitability of the US ethane cracking plant to produce ethylene is not good, which will reversely cause the ethane price to fall
.

The propane dehydrogenation spread will soon be repaired under short-term pressure, and the downstream acrylic acid and ester are very resilient
.
In 22Q2, the average market price of acrylic acid and butyl acrylate of the company was -8.
78% and -9.
09%, and the price of raw material propane was +1.
38%, which remained stable as a whole
.
In terms of price difference, the price difference of propane dehydrogenation (PDH), polypropylene-propylene, acrylic acid-propylene, butyl acrylate-acrylic acid was -7.
11%, +38.
43%, -15.
42%, -9.
48% respectively
.

From the perspective of C3 upstream, the 22Q2 CFR price of propane in East China continued to increase by 1.
38% month-on-month, and the PDH spread was obviously under pressure
.
Mainly because propane has fuel properties, the price in the first half of the year was at a high level with the rise of international energy prices, and the price will fall seasonally after the arrival of summer
.
At the same time, the downturn of the macro economy and the slowdown in real estate demand have hindered the transmission of propylene prices, and the profitability of PDH units has been challenged to a certain extent.
At present, it has reached the lowest price difference level after the introduction of PDH in China
.
As the demand for propane heating gradually declines and the demand for propylene recovers, we expect that the downward space for the price difference has been limited, and it is expected to be gradually repaired in the future
.

Raw material cost advantage + high investment in research and development Two-wheel drive, satellite overweight new materials open up growth space

The second phase of Lianyungang ethane cracking will be put into operation soon
.
On June 1, the company issued a progress announcement.
The second phase of the Lianyungang Petrochemical Co.
, Ltd.
's annual output of 1.
35 million tons of PE, 2.
19 million tons of EOE and 260,000 tons of ACN combined plant will be handed over on June 1, 2022.
It is expected that the project will start to contribute to performance in Q3 of 2022, bringing about a large increase in performance
.
In addition, the company's total investment is about 10.
2 billion yuan to build an annual output of 800,000 tons of PDH, 800,000 tons of butanol, 120,000 tons of neopentyl glycol and supporting equipment.
It is expected to be completed and put into operation by the end of 2023.
It makes up for the constraints of the company's acrylate industry chain that requires external extraction of n-butanol, and realizes an endogenous cycle
.

The green chemical new material industrial park project will be completed and put into production within this year
.
At the end of 2021, the company announced to invest in a new green chemical new material industrial park project with a total investment of about 15 billion yuan.
The construction content mainly includes an annual output of 200,000 tons of ethanolamine (EOA), an annual output of 800,000 tons of polystyrene (PS), and an annual output of 200,000 tons.
100,000 tons of α-olefin and supporting POE, carbonate series production equipment with an annual output of 750,000 tons and related supporting projects will be implemented step by step in three phases
.
The company issued an announcement stating that the first phase of the first phase of the project is progressing smoothly, the long-term equipment has been ordered, and the civil construction has begun.
It is expected to start construction and trial production in the third quarter of 2022
.
The green chemical new material project company has forward-lookingly deployed a series of new material series projects such as battery-grade carbonate, α-olefin and POE.
With the advantages of light hydrocarbon raw materials and forward-looking and high-intensity R&D investment, it is expected to be in the new The competition for materials stood out
.