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Last Night, Hengli Shares Passed The Major Decision And Launched The Third Phase Of The Employee Stock Ownership Plan.

2019/6/12 10:01:00 132

Hengli SharesESOPHengli PetrochemicalPolyester Filament

China's polyester filament industry leader, Hengli Formosa Petrochemical Co (hereinafter referred to as "Hengli shares") announced in the evening of June 11th that the company held the second meeting of the eighth board of directors today, and voted through 7 votes, 0 votes and 0 abstentions. It passed the "motion on changing the company's securities abbreviation" and agreed to change the company's securities from "Hengli stock" to "Hengli petrochemical", and the company's securities code remained unchanged.

Hengli shares said that in order to meet the major changes in the main business scope of the company and the need for business development, the board of directors of the company decided to change the securities abbreviation into "Hengli petrochemical".

After the change, the meaning of "Hengli petrochemical" is clearer, pointing more clearly, reflecting more accurately the main business characteristics of the company, and improving the recognition degree of the company in the market and enhancing the market influence.

Yesterday evening, Hengli shares also disclosed the third phase of the employee stock ownership plan. The source of funds is the incentive fund extracted by the company, and the total amount does not exceed 170 million yuan.

After the establishment of the shareholding plan, the professional institutions will be entrusted to manage the shares and fully subscribe for the inferior share of the trust plan.

The trust scheme will set up the priority share and the inferior class share according to the 1:1 ratio, and the total amount of the fund will be 340 million yuan.

Chen Jianhua and Fan Hongwei, the real controller of the company, provide joint and several liability for the principal and expected revenue of the trust scheme's priority share, providing the bottom guarantee for the inferior share of the trust plan, and ensuring that the annual reward rate calculated by the company's reward fund is no less than 8%.

Public information shows that Hengli shares were listed on the big rubber market in March 2016. In February 2018, the company injected PTA assets of the group and 20 million tons of refining and chemical integration assets under construction. By the end of 2018, the company had polyester production capacity of 2 million 810 thousand tons of polyester processing capacity (FDY110 million tons, DTY45 tons, 200 thousand tons of industrial yarn), PTA's single plant design capacity of 6 million 600 thousand tons, currently the largest single unit capacity in the world. In 2018, the company achieved 60 billion 67 million yuan of operating income and 3 billion 323 million yuan of net profit attributable to the parent company.

In order to solve the problem of high PX price of raw materials in the upstream of PTA, the problem of profit being monopolized by PX in the industrial chain of PX-PTA- polyester, Hengli Group, a major shareholder, started building a 20 million tonne refining and chemical integration project in 2017, extending its business from the previous polyester NEW materials and PTA fields to the PX and refining links of the upstream industry.

Reporters learned that Hengli shares under the "Hengli refinery 20 million ton / year refining and chemical integration project" is located in Changxing Island, Dalian, belongs to the national planning seven big petrochemical industrial base, is the first approved national private oil refining and chemical integration project, is also the national development and Reform Commission to promote the old industrial base in East and North revitalization, three years rolling key propulsion project.

The core product of the project is 4 million 500 thousand tons / year PX product, and also produces refined oil and other chemical products.

The investment of the project is 56 billion 200 million yuan, including 20 million tons of atmospheric and vacuum distillation and 11 million 500 thousand tons of heavy oil hydrogenation unit. The core Aromatics Complex has the largest volume of monomer in the world, and the project is equipped with complete public facilities such as terminals, power plants and so on.

The whole refinery and park are built with high quality, adopting the most advanced technology and optimized processing flow, high degree of integration and complete matching. The competitive advantage in high quality, low cost, safety and environmental protection is obvious, which can be regarded as the benchmark petrochemical project in the industry.

Hengli refining and chemical integration project reached full load in May 2019, first to build and realize the whole industry chain development mode from "crude oil - PX - PTA polyester" in the industry.

The project was approved by the EIA in August 2015 and started construction in 2017. The project was successfully put into full operation in May 2019 and completed in 19 months.

With the success of the refinery project, PX and acetic acid directly supply the downstream PTA plant through Hengli refinery project. Compared with the imported PX from abroad, it can save more than one billion yuan in intermediate costs such as tariffs, freight, handling, loss and so on, greatly reducing the cost of raw material procurement and pportation.

The vertical integration of the listed companies along the upstream of the industry chain can achieve PX self-sufficiency, so as to further strengthen the company's upstream capacity base and the leading edge of development, and at the same time, it can help optimize the company's business structure and enhance its anti risk level through integrated operation.

The calculation from Shen Wan Hongyuan securities shows that Hengli's 20 million ton refining and chemical integration project can achieve an average profit of 8 billion 460 million in the history of redevelopment, which is conducive to enhancing the continuous profitability of listed companies. The profit volume of Listed Companies in the next two years is expected to reach ten billion level.

Hengli shares announced the one or two phase of the employee stock ownership plan and progress in June 2017 and 2018 respectively. At the same time, the company announced the controlling shareholder's increase plan in April 3, 2019, and increased the company's shares within 3 months since April 4, 2019. The price range of the increase is not less than 18 yuan / share, not more than 20 yuan / share, the amount of increase is not less than 200 million yuan, not more than 500 million yuan; the company's April 11, 2019 remark announcement of centralized buyback shares repurchase report, the total amount of the proposed repurchase fund is no less than RMB 1 billion yuan, not more than 2 billion yuan.

As of April 30, 2019, the company had accumulated about 79 million 890 thousand shares of repurchase shares through centralized bidding, accounting for 1.58% of the total share capital of the company, and the total amount paid was about 1 billion 100 million yuan.

Earnings reports also show that Hengli shares have benefited from the boom in the polyester industry since its listing. Business revenue has maintained rapid growth, operating income in 2018 was 60 billion 67 million, net profit was 3 billion 402 million, up 170% and 95% respectively compared with 2017.

The explosive growth in 2018 was due to the merger of the high quality assets of Hengli Group (Hengli investment and Hengli refining).

In the first quarter of 2019, Hengli shares' operating income and net profit were 15 billion 53 million and 480 million, respectively. The year-on-year growth rate was 30% and -57% respectively. The increase in the first quarter was mainly due to the sharp rise in raw material prices.

Chen Jianwen, an analyst at Ping An Securities, believes that the completion of two large-scale employee stock ownership plans of Hengli stock company has highlighted the company's information, which is conducive to enhancing the cohesion of the company staff and will play a positive role in promoting the company's business development.

In Chen Jianwen's view, compared with domestic refining and chemical enterprises, Hengli refining and refining is one of the best refining and chemical enterprises in China from the perspective of scale, technological complexity and industrial matching. Its advantages and technical characteristics are mainly reflected in the following aspects.

Scale advantage: the construction of constant force refining and chemical projects includes 20 million tons of atmospheric pressure, 11 million 500 thousand tons of heavy oil hydrogenation unit, 9 million 600 thousand ton reformer, 4 million 500 thousand ton aromatics and 1 million 300 thousand tons of mixed dehydrogenation unit. No matter from the monomer unit and the overall scale, it is the leading and international super large refinery project in the country. Although China oil and Sinopec also have a few more than 20 million tonnes of refineries, because of historical reasons, most of their devices are reformed or replaced from small old devices, and the scale of the average single set is smaller than constant force refining.

From this point of view Hengli refining and petrochemical project has obvious advantage of late development.

The process design is reasonable: use the route of atmospheric vacuum distillation - heavy oil hydrocracking catalytic reforming aromatics separation to maximize the utilization of PTA downstream of crude oil production and PX required by polyester business, so as to achieve the perfect synergy with the company's stock business.

The project has designed a 4 million 500 thousand ton aromatics unit of PX/. The design of the whole refinery has the characteristics of "aromatics and less production of refined oil".

Under the background of excess gasoline and diesel in China and high dependence on PX raw materials, the process design of refinery and petrochemical projects is very reasonable.

Global technology procurement: the project not only uses the mature technology of Sinopec, but also adopts the most advanced and mature process package technology such as Chevron, Lummus, GTC, Topsoe, Axens and so on. Sewage treatment uses the world's leading French Degremont technology to build a world-class refinery with high efficiency, energy saving, green and environmental protection.

The degree of integration is high: as the project and Hengli petrochemical PTA plant are adjacent, the 4 million 500 thousand tons of aromatics generated by the refinery project can be directly pported to the PTA plant by pipeline, which can save a lot of freight, tariff, loss and other intermediate costs.

At the same time, the project will build coal hydrogen production, PSA hydrogen purification and acetic acid plant, and use the hydrogen and PTA acetic acid needed by the Qinhuangdao / Caofeidian Coal production refinery to facilitate pportation. After the completion of the project, the acetic acid in the PTA plant will be fully self-contained.

Making full use of by-products to produce high value-added products: the project makes full use of chemical light oil produced by refining and chemical projects, and builds light hydrocarbon recovery and mixed alkane dehydrogenation units to produce high value-added chemicals such as olefin and polyolefin and ethylene glycol downstream. After the operation, some products are sold, and ethylene glycol products can be used for polyester production in the company to achieve further synergy of the industrial chain.

It is expected that the integrated refining and chemical integration project will be put into operation at the beginning of the first quarter of 2019 or the beginning of the 2 quarter. After the project is put into operation and stable operation, Hengli shares will enter a new stage of development.

The existing PX and acetic acid required for PTA and polyester will be fully self provided. "Fang Ting (PX) - PTA (purified terephthalic acid) - polyester household silk and industrial yarn" will be linked to the whole industry chain, bringing more synergy effect to the enterprise than the current industrial chain.

After the ethylene and glycol projects are put into operation, glycol will also be self sufficient to reduce the external dependence and pportation risk of raw materials.

PX is currently the highest level of gross profit in polyester industry chain, and the commissioning of refining and chemical projects means that the company has seized the commanding heights of profits in the whole industry.

As the company's refining and petrochemical projects accelerate production and gradually contribute to profits, it will further enhance Hengli's continuous profitability and operational risk level.

Chen Jianwen believes that Hengli shares are currently building the most rapid private large-scale refinery projects in China. After commissioning, they will help enterprises seize the commanding heights of the industry profits and build the polyester industry chain.

Based on the company's stock business, the commissioning time of construction projects, the capacity expansion plan for long-term expansion, the trend of international crude oil prices, and the downstream market (clothing, automobile and finished oil market), the net profit attributable to the parent company in 2018-2020 years is expected to reach 3 billion 600 million yuan, 9 billion 600 million yuan and 12 billion 500 million yuan respectively.

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