On the evening of October 24, Satellite Chemical released its third quarter report. In the first three quarters of this year, Satellite Chemical achieved revenue of 30.882 billion yuan, a year-on-year increase of 11.21%; net profit attributable to parent companies was 3.394 billion yuan, a year-on-year increase of 11.43%; basic earnings per share was 1.01 yuan. The company's profit performance is close to the upper limit of the previous performance forecast guidance.
Looking specifically at the performance in the third quarter, Satellite Chemical's single-quarter performance increased significantly. The company's net profit attributable to parent companies in the third quarter reached 1.551 billion yuan, a year-on-year increase of 560.04% and a month-on-month increase of 36.58%.
Satellite Chemical's profit boost in the third quarter may mainly benefit from the rebound in product prices. A recent brokerage research report pointed out that in the third quarter of 2023, the prosperity of the C3 industry chain increased. The prices of the company's main products all increased month-on-month. The price differences of polypropylene, acrylic acid, and butyl acrylate improved month-on-month in the third quarter.
In terms of performance growth, Satellite Chemical previously stated in its performance forecast that during the period, the company closely focused on its development strategy and business management goals, focused on "technological leadership" and "management leadership", and gave full play to its advantages in industrial chain integration and technological innovation. Maintain the "safe, stable, long-term, full and optimal" operation of each production device, constantly explore and tap the potential of the devices to reduce costs and increase efficiency, seize market opportunities and formulate effective business strategies to ensure maximization of benefits in the industrial chain.
It is worth mentioning that in the third quarter, Satellite Chemical started to acquire Jiahong New Materials, further increasing the C3 downstream industry chain. On the evening of September 12, Satellite Chemical announced that Lianyungang Petrochemical planned to acquire 100% of the equity of Jiahong New Materials held by Satellite Holdings and Kunyuan Investment for 1.524 billion yuan in cash.
Lianyungang Petrochemical is a wholly-owned subsidiary of Satellite Chemical established in 2017. In the same year, the company signed a Lianyungang Petrochemical project cooperation agreement with the National East, Central and West Regional Cooperation Demonstration Zone (Lianyungang Xuwei New District) to build China's first set of ethane cracking to ethylene equipment. In August last year, the Lianyungang petrochemical project was fully completed and put into operation.
The target Jiahong New Materials was established at the end of 2019 and mainly sells two products: propylene oxide and hydrogen peroxide. It is understood that Jiahong New Materials has built three sets of 450,000 tons/year HP units, one set of 400,000 tons/year PO units, 220KV total reduction, elevated flares, supporting warehousing and public works and other supporting facilities. At present, Jiahong's new material production equipment is in normal operation, the PO equipment has reached production standards, and the products have begun to be sold externally.
The project also attracted the attention of institutional investors, and subsequently more than 200 institutions organized groups to investigate satellite chemistry. During the research activities, Satellite Chemical emphasized that as Jiahong New Materials is officially put into production, through the company's acquisition of 100% of its equity, it will reduce related transactions between listed companies and related parties, and avoid potential peer competition between subsequent Jiahong New Materials product layout and listed companies in advance. Jiahong New Materials has reserved more than 1,500 acres of land and has clear planned projects. The completion of this acquisition will further open up the growth space for the development of Jiahong New Materials, and will also help increase the company's layout in the industrial chain.
Since the beginning of this year, major satellite chemistry projects have continued. On June 17, Satellite Chemical and Xuwei New District held a signing ceremony for the high-end new materials industrial park project for comprehensive utilization of α-olefins. The total planned investment in the project is 25.7 billion yuan, of which fixed asset investment is approximately 20.8 billion yuan.
This project is based on the company's development strategy of building a low-carbon new chemical material technology company with the integration of light hydrocarbons as the core, and relying on the resource and location advantages of Xuwei New District as the country's seven major petrochemical industry bases. It will be built in the existing Lianyungang petrochemical production base. Based on the strategic layout, its investment scale is equivalent to rebuilding a Lianyungang project base. The company will use independently developed high-carbon Alpha-olefin technology extends downstream to new materials such as high-end polyolefins, polyethylene elastomers, lubricant base oils, ultra-high molecular weight polyethylene, and at the same time, the by-product hydrogen is utilized as a resource to achieve the project's carbon reduction goals and further Lay a solid foundation for the development of the company’s functional chemicals, high-end new materials and new energy materials.
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