[Industry Focus]：Oriental Sheng Hong's performance increased by 492.66% in 2021! Accelerate the layout of "refining and chemical industry chain" and start construction of three million-ton projects

On April 18, 2022, Dongfang Shenghong (000301) released its annual report for 2021. in 2021, the company realized operating income of 51.722 billion yuan, an increase of 53.48% year-on-year; The net profit attributable to shareholders of the parent company was 4.544 billion yuan, a big increase of 492.66% year-on-year.

at present, the domestic petrochemical industry is large but not strong, and the market demand side puts forward higher requirements for high-end, high-performance fine chemical products and new materials. In 2021, Dongfang Shenghong fully started the strategic transformation of new energy and new materials. During the reporting period, a "integrated" business pattern of core raw material platform + diversified industrial chains such as new energy and new materials was formed.

According to the financial report, in 2021, the company achieved operating income of 51.722 billion yuan, an increase of 53.48% year-on-year; The net profit of the parent was 4.544 billion yuan, a year-on-year increase of 492.66%.

From the perspective of business structure, at present, the company focuses on refining, new energy and new materials, and polyester chemical fiber business.. Among them, refining and chemical sector is the raw material guarantee platform for the company's polyester chemical fiber industry and new material industry. Sheng Hong refining and chemical integration project takes the path of small oil head and large chemical industry. The project "less oil and more" has the competitiveness and anti-risk ability to extend to the downstream chemical high-end materials. In addition, in order to continuously strengthen the accumulation of apples-to-apples comparison advantages of refining and chemical projects, the ongoing and proposed projects associated with the company are also entering the process one after another.

Judging from the projects that have been laid out so far, shenghong refining 2# ethylene glycol + phenol/acetone project, design ethylene glycol device scale 10/900,000 tons/year, phenol/acetone device scale 40/250,000 tons/year; hongwei chemical POSM and polyol project, design ethylbenzene device scale 508,000 tons/year, propylene oxide/Styrene device scale 20/450,000 tons/year, polyether polyol device scale 112,500 tons/year, polymer polyol device scale 25,000 tons/year and so on, the completion of these projects will double strengthen the supporting effect of upstream refining and chemical sector on the extension of downstream fine chemical industry chain.

This project is of great significance to Dongfang Shenghong and is the key layout of the company's large-scale chemical enterprises covering oil head, coal head and gas Head. For example, Shenghong's refining and chemical integration project has entered the normal production stage, oriental Sheng Hong's ability to cross periodic fluctuations may be significantly enhanced.

in the field of fine chemical new materials, Dongfang Shenghong is regarded as the private refining and chemical integration enterprise with the longest cultivation time. In 2021, Dongfang Shenghong successfully completed the acquisition of silbang Petrochemical.

As the largest EVA manufacturer in China, silbang Petrochemical will become an important production base of new energy and new materials in Dongfang Shenghong, focusing on producing high value-added olefin derivatives to form propylene, the diversified product structure developed cooperatively by ethylene and derived fine chemicals, and the designed production capacity of MTO unit which has been put into operation is about 2.4 million tons/year (based on methanol).

By the end of the reporting period, the annual EVA production capacity of Dongfang Shenghong was 300,000 tons, accounting for about 20.38% of the total domestic production capacity, of which the annual output of photovoltaic EVA was over 200,000 tons, accounting for about 28% of the global photovoltaic EVA production; acrylic nitrile has an annual capacity of 780,000 tons and is the acrylic nitrile production base in China and the main raw material supplier of domestic carbon fiber enterprises.

In the field of polyester chemical fiber, polyester filament is an important raw material for textiles. As the upstream industry of textile industry, the consumption of polyester filament has also shown a steady growth trend in recent years. Dongfang Shenghong currently sets up chemical fiber production bases in Wujiang, Suzhou and Suqian Siyang respectively. By the end of the reporting period, the company has 2.6 million tons/year differentiated fiber production capacity, including over 300,000 tons/year recycled fiber production capacity, the differentiation rate exceeds 90%, mainly high-end DTY products. The main business entities of the company's polyester chemical fiber include Guowang Gaoke and its subordinate enterprises located in Wujiang area, as well as Guowang Suqian and Ruibang technology located in Siyang area.

In addition to existing projects, the pace of the company's capacity expansion is also accelerating.: At the beginning of 2022, many expansion projects have been laid out. On January 12, 2022, the company announced jiangsu Ruibang Technology Co., Ltd., a second-level wholly-owned subsidiary will investment and Construction phase II project with an annual output of 250,000 tons of recycled differential and functional polyester filament and supporting elasticized, the estimated total investment is 2.838 billion yuan, and the construction period is 2 years.

Then, another company level 2 wholly-owned subsidiary Guowang Gaoke fiber (Suqian) Co., Ltd. Will also investment and Construction Phase II annual output of 500,000 tons Super simulation functional fiber project, the estimated total investment is 3.612 billion yuan, and the construction period is 2 years. In March, Oriental Sheng Hong made another big move, honghai New Materials (Suqian) Co., Ltd, a wholly-owned subsidiary of the second level it is planned to invest 6.655 billion yuan to set up an intelligent functional fiber project with an annual output of 1 million tons. Announcement, lianyungang Hongke New Material Co., Ltd., a third-level holding subsidiary, plans to invest 7.471 billion yuan to build a degradable material Project (Phase I). As new production capacity is launched one after another, it is expected that the company's filament business will achieve stable performance increase in the next three years.

sheng Hong Group has started to build three "million tons" projects to build a world-class industrial cluster of new energy and new materials. Respectively, million ton EVA photovoltaic new energy material project, million ton acrylic nitrile new material, million ton Green degradable material project.

EVA resin is the most mainstream raw material of photovoltaic adhesive film. With the rapid development of new energy industry represented by solar photovoltaic, the market of photovoltaic raw materials such as EVA is in short supply, it is expected that the high prosperity of the industry will continue for a long time.

Scherbang Petrochemical, a wholly-owned subsidiary of Shenghong Group, relies on its good cooperative relationship with scientific research institutes such as Tsinghua University and petrochemical research institute of Chinese Academy of Sciences. EVA photovoltaic material products independently developed through special technical research are at Crystal Point, major breakthroughs have been made in key indicators such as melting finger. At present, the annual output of EVA of silbang petrochemical can reach 300,000 tons, of which the production capacity of photovoltaic EVA exceeds 200,000 tons, which can account for 28.6% of the global output of photovoltaic EVA. The next step is to expand EVA capacity to 1 million tons/year.

acrylic nitrile is one of the important raw materials of three synthetic materials, which occupies a prominent position in List of synthetic polymers materials and has broad application prospects. At the same time, as an important upstream raw material for the development of new energy and new material industry, it is mainly used to produce carbon fiber, ABS resin/plastic, nitrile rubber, acrylic fiber, etc.

Sheng Hong SIBANG petrochemical currently has a capacity of 520,000 tons/year. As acrylic nitrile production base in China, it can guarantee more than 50% of the raw material supply of domestic carbon fiber production enterprises. Next, the overall production scale of acrylonitrile will reach 1.04 million tons/year according to the existing industrial layout planning of silbang petrochemical, and it will become the largest acrylonitrile production base in the world after reaching the end of the year.

At present, there are three kinds of degradable materials entering the practical stage at home and abroad: starch plastic and polylactic acid (PLA), dibasic acid diol Copolyester (PBS, PBAT), polyhydroxy fatty acid ester (PHA), products are widely used in engineering plastics, special films, packaging materials, medical equipment, communications optical cable and other fields. With the impact of the global overall "Plastic Limit" policy, the application field and market of degradable plastics will be more and more extensive in the future.

In 2022, Dongfang Shenghong will continue to further promote the strategic transformation layout of new energy materials on the basis of making full efforts to build three major projects: one million ton EVA photovoltaic new energy materials, one million ton acrylic nitrile new materials and one million ton Green degradable materials.