Technology creates the future. The core development philosophy practiced by Satellite Chemical (002648. SZ), a leading light hydrocarbon enterprise, has helped the company achieve sustained countercyclical growth in the context of the "double decline" in the chemical sector. Among them, the gross profit margin of the company's functional chemicals and polymer new materials maintained good growth, hydrogen was officially sold to the outside world, and the operating income of new energy materials increased by 217.46% year-on-year.
On the evening of July 17th, Satellite Chemical announced that its operating revenue for the first half of 2024 was 19.4 billion yuan, with a net profit attributable to the parent company of 2.056 billion yuan, a year-on-year increase of 12.51%; After deducting non recurring expenses, the net profit attributable to the parent company was 2.234 billion yuan, a year-on-year increase of 14.46%.
It is worth mentioning that the company's future R&D center will start construction on May 28, 2024, increasing the introduction of high-end talents from home and abroad, and building a low-carbon chemical new material technology company's R&D innovation system. As of June 30, 2024, the total number of R&D personnel in the company was 1343, a year-on-year increase of 14.3%, and 3 national level high-end talents were introduced.
Continuous countercyclical growth in net profit
In the first half of 2024, the overall performance of Satellite Chemical was not significantly affected by industry weakness and major maintenance of ethylene and other facilities. During the period of overall revenue and profit decline in the industry, Satellite Chemical achieved a gross profit margin of 21.08%, which continued to improve compared to the gross profit margin in 2023, demonstrating its ability to weather cycles.
For the external environment, Satellite Chemical stated that the chemical industry is in a structured supply-demand contradiction of low-end surplus and high-end shortage. The company believes that the global economic situation will still face a series of difficulties and challenges in 2024, with the complexity, severity, and uncertainty of the external environment increasing.
According to the announcement, according to statistics from the China Petroleum and Chemical Industry Federation, the chemical industry sector achieved a revenue of 9.27 trillion yuan in 2023, a year-on-year decrease of 2.7%; Realizing a profit of 486.26 billion yuan, a year-on-year decrease of 31.2%, showing a "double decline" in revenue and profit, is a direct response to the severe development situation of the industry.
In the first half of 2024, the operational indicators of various satellite chemical devices will continue to be optimized. Among them, the high water absorbent resin device independently developed and innovated by Satellite Chemical has achieved full load operation, becoming a supplier for well-known domestic and foreign brands; The ethane cracking to produce ethylene unit has been running efficiently and smoothly for three years, with a leading capacity utilization rate in the industry, setting a new record for the first long-term operation of similar units in the industry. The unit completed routine maintenance in the first half of the year, further optimizing technical indicators; The comprehensive unit consumption of propane dehydrogenation to propylene unit continues to be optimized, and the daily production of propylene has reached a historical high; The new acrylic acid and ester plant has achieved new process innovation, with a new high operating cycle and industry-leading cost.
On June 24th, the satellite chemical alpha olefin comprehensive utilization high-end new material industrial park project was officially launched. The total planned investment of the project is about 26.6 billion yuan, actively responding to the national "carbon peak and carbon neutrality" strategy, encouraging the diversification of petrochemical raw materials, promoting the lightweighting and green low-carbon development of petrochemical raw materials, expanding the import of hydrogen rich raw materials and other policies, relying on the existing light hydrocarbon integrated industrial system for strategic layout, using independently developed high carbon alpha olefin technology, leading industrial innovation with technological innovation, extending downstream layout of 1.7 million tons of high-end polyolefins (including metallocene polyethylene), 600000 tons of polyethylene elastomers, 30000 tons of poly alpha olefins, and resource utilization of carbon dioxide and hydrogen. In the future, the high-end polyolefin products laid out by satellite chemistry will occupy the advantages of market first and technological self-reliance in the process of "domestic substitution" of high-end new materials, shaping new momentum for the development of new quality productivity.
The core competitiveness of the satellite chemical industry will be further enhanced. On July 16th, Satellite Chemical disclosed the "Announcement on the Successful Production of Phase I of Satellite Energy Phase III Project", stating that the 800000 ton per year multi carbon alcohol plant has been successfully put into operation, and the integration level of the C3 industry chain has reached a new height in the industry. It will be able to more efficiently utilize PDH's propylene resources to produce multi carbon alcohols, achieve self supply of core raw materials, and form a closed loop of the propylene acrylic acid acrylic acid ester industry chain.
In response to this, the person in charge of satellite chemistry stated that the company firmly promotes "technological leadership" and "management leadership", responds to uncertain environments and changes with strategic certainty, and has achieved significant results in stable operation of equipment and improvement of operational management quality and efficiency. Moreover, the stable operation time and low energy consumption of multiple satellite chemical devices have set a new record in the industry, achieving excellent operation with high efficiency and quality, and maintaining core business competitiveness.
Breakthrough in research and development of new material technology
In the first half of 2024, the R&D investment in satellite chemistry was 795 million yuan, a year-on-year increase of 10.25%. A total of 115 patents were applied for and 63 patents were authorized. The company also won the title of "Energy Efficiency Leader" in key industries of the Ministry of Industry and Information Technology for 2023 (ethylene and ethylene glycol).
Yang Weidong, Chairman and President of Satellite Chemical, said, "Technological innovation is an inexhaustible driving force for enterprise progress and a core element for developing new quality productivity. Guided by the national strategic requirement of 'actively cultivating emerging and future industries', we have taken the lead in planning and constructing future research and development centers in the industry, actively incorporating the future industry of satellites into the national industrial layout plan, leading technological progress, driving industrial upgrading, and cultivating new quality productivity
According to the announcement, on May 28, 2024, the Satellite Future R&D Center project funded by Satellite Chemical Investment entered the substantive construction stage, committed to creating a research and development innovation and industrialization platform focusing on key strategic areas such as high-performance catalysts, new energy materials, polymer new materials, functional chemicals, and cutting-edge new materials. Relying on the Future R&D Center project, the Satellite Chemistry Program will invest over 10 billion yuan in research and development in the next five years, with innovation incentives exceeding 1 billion yuan. We will increase the introduction of high-end talents from both domestic and foreign sources, build a low-carbon chemical new material technology company's R&D and innovation system, and strive to solve a number of national "bottleneck" technologies through the construction of strategic and leading projects, achieving "technological leadership".
At present, satellite chemical alpha olefins (C4, C6, C8) and POE pilot products have reached international standards, and research and development achievements such as metal organic functional material catalysts and low ammonia ratio hydrogenation catalysts have met industrial requirements, achieving breakthroughs in technological bottlenecks and accelerating industrial transformation. High water absorbent resin accelerates customer-centric approach, while stabilizing existing products and accelerating research and development of the latest generation of products.
In 2022, Satellite Chemistry was awarded the title of National Manufacturing Industry Single Champion Demonstration Enterprise. In December 2023, the subsidiary of the company, Zhejiang Satellite New Material Technology Co., Ltd., was officially approved to become the fifth batch of specialized, refined, and new "little giant" enterprises in China, and was awarded the top 50 ESG innovative enterprises by Forbes China in 2023.
It is worth mentioning that recently, the Ministry of Industry and Information Technology and nine other departments jointly released the "Implementation Plan for Innovative Development of Fine Chemical Industry (2024-2027)", which points out that fine chemicals and new chemical materials are the key engines to promote the high-quality development of the petrochemical industry. Satellite Chemistry believes that the plan is in line with the company's development strategy, which is beneficial for the company to utilize its existing integrated industrial chain and scientific research advantages to develop downstream, with a clearer direction, a more solid platform, and richer resources.
Satellite chemistry indicates that it will deepen the research and innovation of the industrial system, achieve breakthroughs in both efficiency and scale, and invest more high-end and low self-sufficiency chemical new material products in national economy and people's livelihood industries such as aerospace, automotive industry, electronic semiconductor, medical and health.