Shaanxi Black Cat (601015.SH): The 80,000-ton/year ammonia synthesis project is set to be completed and put into operation in 2022

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Shaanxi Black Cat (601015.SH): The 80,000-ton/year ammonia synthesis project is set to be completed and put into operation in 2022. Author/Source: Date: April 13, 2022. Click-through rate: 16. On April 6, Shaanxi Black Cat (601015.SH) stated during a research session that it achieved revenues of 18.895 billion yuan in 2021, a year-on-year increase of 97.07%. The net profit attributable to shareholders of the listed company reached 1.527 billion yuan, a year-on-year increase of 670.47%. The net profit attributable to the shareholders of the listed company, after deducting non-recurring gains and losses, was 1.362 billion yuan, representing a year-on-year increase of 675.88%. During the reporting period, the increase in revenue was mainly attributable to the continuous rise in selling prices of the company’s main products, as well as a significant increase in their production and sales volume; the selling prices of the company’s main products continued to rise, and both production and sales volumes saw substantial growth. The increase in net profit attributable to the parent company was mainly due to an increase in the gross profit from chemical products, as well as a year-on-year rise in earnings from long-term equity investments. In terms of coal revenue, Shaanxi Black Cat acquired Zhangye Hongneng Coal Industry Company in November 2021; this company mainly produces 1/3 coking coal, and it is expected to contribute to the revenue in 2022. In terms of revenue from chemical products, Inner Mongolia Hei Mao’s production process for 300,000 tons of methanol per year was put into operation in the fourth quarter of 2021. Additionally, in the first quarter of 2022, due to internal and external environmental factors, the prices of its main products rose on a month-on-month basis, which provided some support to the company’s performance. Regarding the high level of inventory at the end of 2021, Shaanxi Black Cat stated that this was due to rising prices of raw materials and finished products during that year. In 2022, the company actively adjusted its procurement strategy by increasing the proportion of long-term contracts for purchases from upstream suppliers; this proportion is expected to reach around 40% by the end of 2022. In terms of production capacity, a methanol plant with an annual capacity of 300,000 tons has already been built, and the synthetic ammonia plant with an annual capacity of 80,000 tons will also be completed and put into operation in 2022, starting to contribute to production in that year. One of the units in Inner Mongolia Hei Mao Phase II’s 8.8-million-ton coking project, namely Coking Oven No. 3 (with an annual capacity of 1 million tons of coke), has already obtained the necessary energy consumption standards and all related approval procedures have been completed. The company plans to start construction in 2022, with operation expected to begin in 2023. The specific aspects of the investigation are as follows: I. Company Introduction: Shaanxi Black Cat Coking Co., Ltd. is a company that integrates coal mining, coking, chemical production, trade and logistics, wastewater treatment, and building materials production, thus representing a model of comprehensive resource utilization. Based on coal as its foundation and chemical products as its core, the company develops a circular economy industry chain following a technology approach that combines coking, gas production, and chemical manufacturing: coal is mined, and washed coal is used for coking to produce coke; the coal gas generated from coke ovens is processed to extract raw materials such as coal tar and crude benzene, which are then used to produce methanol, liquid ammonia, LNG, urea, and 1,4-butanediol. The by-products of coal washing, namely coal sludge and medium coal, are used in boilers to generate steam, while the ash from these boilers is used to make bricks. The steam produced is supplied to other production units within the company, and the treated wastewater is reused in the production processes for coal washing, coke quenching, or landscaping purposes. The entire industrial chain achieves a circular process of “resources → products → waste → recycled resources”, which enhances the economic efficiency of enterprises and realizes a win-win situation for both economic development and environmental protection. The company has production bases in Hancheng, Shaanxi; Bayannur, Inner Mongolia; and Zhangye, Gansu. Currently, its annual production capacity includes 900,000 tons of coal, 7.8 million tons of coke, 600,000 tons of methanol, 400,000 tons of ammonia, 250,000 tons of LNG, 60,000 tons of 1,4-butanediol, 480,000 tons of urea, 80 million autoclaved fly ash bricks, as well as other coal chemical by-products such as tar and crude benzene. In 2021, the company achieved remarkable business results, with a significant increase in net profit attributable to shareholders of the listed company. Specifically: the operating revenue was 18.895 billion yuan, an increase of 97.07% compared to the same period last year. The main reason for this was the continuous rise in the selling prices of the company’s main products, along with a significant increase in their production and sales volumes. The net profit attributable to the shareholders of the listed company was 1.527 billion yuan, an increase of 670.47% compared with the same period last year. The main reasons for this were the increase in the gross profit from the company’s chemical products, as well as an increase in earnings from long-term equity investments.