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    600309   CNE0000016J9

WANHUA CHEMICAL GROUP CO., LTD.

(600309)
  Report
End-of-day quote Shanghai Stock Exchange  -  2022-06-23
93.42 CNY   +1.69%
05/21WANHUA CHEMICAL : Annual Report of 2021
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04/27Wanhua Chemical's Q1 Profit Plunges 19% as Higher Input Costs Offset Strong Sales
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04/25Wanhua Chemical Group Co., Ltd. Reports Earnings Results for the First Quarter Ended March 31, 2022
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Wanhua Chemical : Annual Report of 2021

05/21/2022 | 10:46pm EDT

2021

ANNUAL REPORT

2021 Annual Report

WANHUA CHEMICAL GROUP CO., LTD.

Major Accounting Data and Financial Indicators in Recent Three Years

Major Accounting Data

Unit: RMB

Major Financial Indicators

2021

2020

Year on Year (%)

2019

Sales Revenue

145,537,817,628.55

73,432,968,475.63

98.19

68,050,668,650.78

Net Prot Attributable

24,648,748,123.08

10,041,428,014.60

145.47

10,129,985,097.55

to Shareholders of the Company

Net Prot Excluding

Non-recurring Prot or Loss

24,356,144,091.02

9,543,943,787.70

155.20

9,156,342,202.26

Attributable to Shareholders of

the Company

Net Cash Flow from

27,922,292,184.74

16,849,705,990.71

65.71

25,932,941,200.65

Operating Activities

31 December 2021

31 December 2020

Year on Year (%)

31 December 2019

Net Assets Attributable to

68,498,529,410.78

48,780,345,139.19

40.42

42,364,094,555.73

Shareholders of the Company

Total Assets

190,309,582,268.84

133,752,669,388.47

42.28

96,865,322,655.29

Major Financial Indicators

Major Accounting Data

2021

2020

Year on Year (%)

2019

Basic Earnings Per Share (RMB/Share)

7.85

3.20

145.31

3.23

Diluted Earnings Per Share (RMB/Share)

N/A

N/A

N/A

Basic Earnings Per Share Excluding

7.76

3.04

155.26

2.92

Non-Recurring Prot or Loss (RMB/Share)

Weighted Average Return on Net Assets (%)

42.53

22.20

Increased by 20.33%

25.44

Weighted Average Return on Net Assets Excluding

42.02

21.10

Increased by 20.92%

22.99

Non-Recurring Prot or Loss (%)

Quarterly Financial Data for the Year 2021

Unit: RMB

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Sales Revenue

31,312,426,108.62

36,344,576,218.01

39,661,459,110.82

38,219,356,191.10

Net Prot Attributable to

Shareholders of the

6,621,369,972.77

6,909,027,828.67

6,011,362,948.98

5,106,987,372.66

Company

Net Prot Excluding

Non-recurring Prot or Loss

6,369,684,229.07

6,825,491,599.75

6,082,410,470.22

5,078,557,791.98

Attributable to Shareholders of

the Company

Net Cash Flow from

3,018,987,568.06

8,066,257,400.27

6,397,341,388.94

10,439,705,827.47

Operating Activities

2021 Annual Report

Management Discussion and Analysis

Discussion and Analysis for Operation

In 2021, taking "cost reduction and eciency improve- ment" as its management theme, the Company actively boosted the talent innovation program, optimized the supply chain structure, and improved its operational ef- ciency. It accomplished its goals in safety management, talent cultivation, technical breakthroughs, management innovation, new project construction, operation of new facilities, acquisition & merger, and industrial integration, grasped the opportunity brought by the peak of global chemical industry, and brought the performance of the Company to a new height. Positively responding to the "carbon peak and neutrality" strategy of China, the Com pany made innovative arrangements in the new energy industry, made plans for future development of Wanhua and laid a rm foundation for the quality and sustainable development of the Company in the "14th Five-year Plan" period.

Market and Marketing

In 2021, the vaccination rate in major economies worldwide rose. Economy was recovering, which lifted global market demands for chemical products. However, aec- ted by extreme weather, the pandemic and other factors, part of overseas facilities were short of supply, resulting in large uctuations in global supply chains of the chemical industry, phased imbalance of supply and demand, and price increase of global chemical products. In 2021, the Company's MDI facilities in Yantai received technical reform and the million-ton ethylene industrial chain project and other projects with new capacity and facilities were put into operation, which improved the supply capacity in global market. With years of preparation in global supply chains and channels, the Company overcame diculties brought by the pandemic and other adverse factors, orderly guaranteed market supply for global core customers, expanded its share in global market, and the Company's brand reputation and customer satisfaction in the market were also signicantly improved.

The PU business segment made eorts in both products and solutions, which enhanced each other and maintained rapid growth. The Company mainly "expanded market resources, stretched overseas boundaries, amplied the synergistic advantage, deepened channel reform, and increased long-term interest". It enhanced cultivation and development of potential upstream and downstream industries, deepened the cooperation with global

WANHUA CHEMICAL GROUP CO., LTD.

quality customers, developed more room for market gr- owth, reserved more market resources and invested more in overseas marketing. The Company constantly improved its global supply chain management, implemented exible supply chain management mode, rationally allocated regional resources, reduced logistics cost, and improved customer service eciency. It enhanced its synergistic advantage, gave play to its advantage in polyether and modication technologies and services, and deepened combined marketing of products and solutions to provide integrated, dierentiated, systematic solutions, create value for customers, be the most trustworthy strategic partner of customers and a responsible supplier in the industry, and promote healthy and sustainable development of the industry.

The Petrochemical business segment insisted the "light assets and high turnover" strategy in 2021. While "con- trolling resources, expanding channels, and building sy- stems" on the supply chain, the Company constantly expanded global strategic purchase resources for LPG, took part in LPG operations, reduced purchase cost, and controlled purchase risks. By investing in VLGC and other transportation resources, it rationally controlled logistics costs, improved supply guarantee on the end of raw material purchase and competitiveness in cost. On the sales, it carried out work centering on "the marketing of values, strategies, and culture", actively boosted deepened cooperation mode for strategic customers, and formed the supply chain thinking and the business mode of value chain creation. As a result, it enhanced delivery eciency to customers, optimized customers' cooperation experience, and greatly lifted the depth, width, and satisfaction of customer cooperation.

The Performance chemicals business keeps rapid growth. In 2021, the ADI Business realized the transformation from a follower into a leader. With a shortage of global supplies, the Company made every eort to satisfy the needs of core customers and became the winner of the rst "Excellent Supplier Award" issued by Allnex. In 2021, the Emerging Technology Business Group realized notable sales growth in the water-based resin business and constantly promoted battery materials. Performance Polymers Business Unit further improved the competitiveness of PC products and the operation rate of PC facilities took a domestic leading position in 2021.

2021 Annual Report

In terms of brand building, centering on sustainable de- velopment, the Company tried to establish a good corporate image of achieving carbon neutrality, recycling re- sources, improving human life, and building a harmonious society and joined hands with the relevant parties to establish a brand ecosystem to continuously improve the brand inuence of the Company.

Production and Operation

1. Yantai Industrial Park

In 2021, centering on the management theme of "cost reduction and eciency improvement", the Yantai production base carried out work from reducing production costs, improving eciency, optimizing new facilities, optimizing the start-up of equipment, and optimizing designs.

In terms of production, the Company reached a new level of annual output in 2021. In the rst year of operati- on, the million tons/year ethylene facilities were operating with full load. In February, the technical transformation for the 1.1 million tons/year MDI facilities was com- pleted. Facilities in the industrial park maintained stable output, high yield, and guaranteed supply for global ma- rkets. As to overhaul, throughout the year, the Company completed major overhaul for 44 projects and key technical transformation for 10 projects.

In terms of engineering construction and production pr- eparation, following the management requirements of "lifting standards, strengthening processes, seizing the key points, emphasizing details, improving management, and enhancing eciency", the park improved its team with the standards for "talents with the six good qualities" and tried to build a rst-rate engineering construction team. In 2021, the park promoted a responsibility matrix for supervisors and contractors for PO/SM and BPA pro- jects, boosted cost reduction and eciency improvement with lean construction, and strengthened sample projects and the "5S" management for construction to improvement with lean construction, and strengthened sample projects and the "5S" management for construction to improve civilized construction on the sites. In 2021, Wanhua had 53 projects under construction, wherein 23 projects realized interim delivery.

2. Ningbo Industrial Park

In 2021, centering on the management theme of "cost reduction and eciency improvement", Wanhua Ningbo Industrial Park insisted on the idea of "customer-oriented and integrated park operation" and achieved historical breakthrough in production and operation.

WANHUA CHEMICAL GROUP CO., LTD.

In terms of production, the facilities were safe and stable and ran eciently. Multiple production indicators reached a record high. As to customer-oriented services, dynamic monitoring were implemented for 20 key indicators and extended from product services to services in the production process. In 2021, there were zero customer complaints about all the product series.

In terms of cost reduction and eciency improvement, the park started from shrinking accounting units (taking product lines as the units) and enhancing the sense of business (a business entity taking facilities as the prot center), and continuously created the lean culture, and tried to establish a ne industrial park with best ecie- ncy and optimal costs. As to transformation managem- ent, in 2021, the park comprehensively implemented the overhaul management system for the rst time, continued the ve requirements for projects, and formed

  1. three-in-one(technologies+equipment+contractors) practice system taking the sub-commandpost of facili- ties as the responsible entity, work packages as starting points, process-based standard production as basic re- quirements, to comprehensively improve the quality of overhaul management.

3. Hungary BC Company

In 2021, the BC Company overcame diculties brought by repeated outbreak of the pandemic and synchronous implementation of production and key construction projects. The production facilities ran stably and eci- ently. The sales volume and prots of major products set new records.

BC Company overcame diculties caused by the pandemic and fully coordinated engineering resources to complete the technical transformation for the 350,000 tons/year MDI facilities. Facilities after overhaul and transformation have been put into operation. The production reliability of facilities was further improved.

As to procurement, BC Company strengthened synergistic procurement with the head oce by formulating synergistic procurement strategy for materials of key projects and the lean synergistic projects for raw and auxiliary materials. The procurement costs were consecuti vely lowered.

As to logistics, BC Company overcame the diculties brought by the pandemic and the shortage of transport ca- pacity. The delivery was smooth and the customer satisfaction and trust were largely enhanced.

2021 Annual Report

WANHUA CHEMICAL GROUP CO., LTD.

4. Fujian Industrial Park

The project approval and engineering construction (MDI facilities, TDI facilities, and PVC facilities) of Fujian Industrial Park were progressing as scheduled. For safety ma- nagement, the park continued to intensify safety risk analysis and the grid-based safety supervisor system, and integrated forces (employer, supervisor, and general co- ntractor) for safety management. For production mana- gement, the park continued to take gasication units as the experimental units to establish the production management system of Wanhua Fujian.

For the personnel shortage for project construction and subsequent production, the park enhanced talent gathering by accepting talents from other bases, recruiting talents from the society and campuses, and cultivating talents internally, to make sucient preparation for the start-up of the Phase I project.

5. Sichuan Meishan Base

The PBAT project and the ternary cathode battery material project of Sichuan Meishan Base were smoothly put into operation. The bioexperiment base realized interim completion in 2021. Through constantly optimizing the modication facilities, the stability of key equipment was notably improved.

Technological Innovation

In 2021, the Company continuously explored the potential of chemical facilities in precise design and process optimization and enhanced their eciency. It also constantly iterated over and upgraded core manufacturing technologies (such as MDI, ADI, TDI) to improve its co- mpetitiveness. After being optimized, the petrochemical units (for acrylic acid and esters, PVC, etc.) ran stably and got to a leading position in the industry. The Company successfully industrialized its proprietary technologies for PO/SM, continuous DMC polyether, and ternary cathode materials. Several new products had passed the pilot test and were ready for industrial scale-up.

In 2021, Wanhua hired more than a hundred university chair professors to introduce cutting-edge academic id- eas. It has established regular relations with domestic and overseas famous universities and carried out all- round cooperation with them in forward-looking technical research, breakthroughs in key technologies, and cultivation of high-end talent. The Company has founded multiple joint innovation centers and labs with leading enterprises in industries for home appliances, aut-

omobiles, green home supplies to boost joint innovation between upstream and downstream of industry chains. It also led the establishment of the Biodegradable Plastics Industrial Alliance to empower the low-carbon development of downstream industries through creating new material solutions and green chemical technologies.

Wanhua Ningbo High Performance Materials Research Institute and Meishan Synthetic Biology Trial Testing Base were put into operation. The roof for the Global Research Center Phase II Project was capped. Meanwhile, the newly established Carbon Neutrality Research Center launched a batch of forward-looking technical R&D projects for emission reduction and comprehensive utilization of CO2. The Company constantly constantly improved the condentiality mechanism of its technical platform for technical innovation. Throughout the year, the Company led for 805 domestic and overseas invention patents and received 416 licenses. A strong IP protection system was established.

Management Innovation

1. Work in "the Year of Cost Reduction and Effici- ency Improvement"

In 2021, the management theme of Wanhua Chemical dized best practice, constantly improved all the emplo- yees' awareness of cost reduction and eciency impro- vement, strengthened management and guidance in cost reduction, prot increase, and eciency improvement. At the same time, under the principles of "comprehens- ive planning, precise design, lean construction, and lean production", the Company improved the cost control and quality of research, design, procurement, engineering construction, and production and operation and realized quality development.

In 2021, there were 1223 company-level cost reduction and eciency improvement projects, including 406 high- quality investment projects and 817 production and management projects. The investment cost or operation cost of new projects were eectively reduced. The cost a wareness of all the employees were notably enhanced.

2. Personnel Development

Focusing on arrangements for new businesses, the Company recruited more talent from the society and attracted nearly 400 talents for scientic research, technolo- gies, and skills. It deepened industry-academy cooperat- ion, enhanced the contact with universities, expanded channels and student resources. The Company received

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Disclaimer

Wanhua Chemical Group Co. Ltd. published this content on 22 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 May 2022 02:45:03 UTC.


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Sales 2022 155 B 23 118 M 23 118 M
Net income 2022 23 180 M 3 465 M 3 465 M
Net Debt 2022 32 664 M 4 883 M 4 883 M
P/E ratio 2022 12,6x
Yield 2022 2,89%
Capitalization 293 B 43 848 M 43 848 M
EV / Sales 2022 2,11x
EV / Sales 2023 1,98x
Nbr of Employees 19 692
Free-Float 44,1%
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Last Close Price 93,42 CNY
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Guang Wu Kou President, General Manager & Director
Zeng Tai Liao Chairman
Xiao Sun Chairman-Supervisory Board
Wan Bin Zhang Independent Director
Yong Jian Bao Independent Director
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