Recently, Zhongtai Chemical disclosed that it plans to invest nearly 6 billion yuan in the construction of a resource comprehensive utilization methanol upgrade demonstration project. However, regarding the progress of the project under construction, there seems to be a big gap between Zhongtai Chemical and related asset appraisal reports in terms of information disclosure. In addition, the pace of related construction of Zhongtai Chemical has continued, and some projects have been voted against by the company's directors on the grounds that "the company has enough projects and should further refine and strengthen the existing industry".
Source: Photogram
Nearly 6 billion yuan invested in the construction of methanol upgrade demonstration projects, and there may be gaps in project progress disclosure
On October 18, 2023, Xinjiang Zhongtai Chemical Co., Ltd. (stock abbreviation: Zhongtai Chemical; Stock Code: 002092. SZ) announced that in order to promote the comprehensive utilization of the existing coal chemical industry, further improve the level of coal grading and quality utilization, and extend the industrial chain, Xinjiang Zhongtai New Materials Co., Ltd. (hereinafter referred to as Zhongtai New Materials), a holding subsidiary, plans to build a methanol upgrade demonstration project (hereinafter referred to as the methanol upgrade demonstration project) in Tongxin Industrial Park, Alehui Town, Tuxun County, Turpan City.
According to the announcement, the methanol upgrade demonstration project plans to invest a total of 5.991 billion yuan, building 1 million tons/year of methanol, 18,900 tons/year of sulfuric acid, air separation unit, gasification unit, low-temperature methanol washing syngas purification device, methanol synthesis plant and supporting equipment. It is expected to be completed and put into operation by the end of 2024.
According to Zhongtai Chemical, the methanol upgrade demonstration project is close to Xinjiang Shengxiong Energy Co., Ltd. (hereinafter referred to as Shengxiong Energy), a shareholding company of the company, and Shengxiong Energy has formed 500,000 tons/year of PVC, 400,000 tons/year of caustic soda, 1 million tons/year of calcium carbide, 750,000 tons/year of blue charcoal, 2 million tons/year of waste residue comprehensive utilization of cement and other production equipment.
The methanol upgrading demonstration project uses the sieve residue (pulverized coal and coke foam) by-products of the blue charcoal plant of its subsidiary Shengxiong Energy and Xinjiang Tianyu Coal Chemical Group Co., Ltd. as raw materials, and realizes hydrocarbon complementarity through the optimal coupling of various raw materials, effectively reducing production costs and carbon emissions, and realizing the comprehensive utilization of low-value material resources. At the same time, blue charcoal tail gas (waste gas) can be purified to produce hydrogen, and hydrogen can be used as the raw gas for the synthesis of methanol, which can reduce the consumption of raw coal and carbon dioxide emissions, and make positive contributions to carbon emission reduction and carbon peaking.
Zhongtai Chemical said that after the completion of the methanol upgrading demonstration project, it can ensure the stable supply of BDO industrial raw materials, the main products of the company's subsidiaries, and achieve mutual support between industries within the company. At the same time, the BDO projects built and under construction in Xinjiang also have the demand for outsourcing methanol, which has created conditions for the development of the methanol market.
The announcement disclosed that the methanol upgrading demonstration project has been approved by the Development and Reform Commission of Xinjiang Uygur Autonomous Region, the approval of the Environmental Impact Report by the Department of Ecology and Environment of Xinjiang Uygur Autonomous Region, the opinions of the Development and Reform Commission of Xinjiang Uygur Autonomous Region on energy conservation review and water resources demonstration, occupational health pre-assessment approval, real estate property rights certificate (special debt part), construction land planning permit, construction project planning permit, safety condition review opinion, etc.
Zhongtai Chemical currently holds 60% of the equity of Zhongtai New Materials, and on the same day on October 18, Zhongtai Chemical also announced that the company intends to acquire the remaining 40% equity of Zhongtai New Materials, and agreed that its holding subsidiary, Xinjiang Zhongtai Chemical Toxun Energy Chemical Co., Ltd. (hereinafter referred to as Toxun Energy), will use the raised funds to acquire 40% of the shares of Zhongtai New Materials, the Zhongtai New Materials Resource Comprehensive Utilization Methanol Upgrade Demonstration Project and the permanent replenishment of working capital of Toxon Energy. Among them, Toxun Energy Chemical plans to increase capital to Zhongtai New Materials with 1.160 billion yuan to implement the methanol upgrade demonstration project.
It should be mentioned that the asset appraisal report disclosed by the company shows that the methanol upgrade demonstration project currently invested and constructed by Zhongtai New Materials obtained the project approval document in August 2022, the overall start of the project is September 2022, and the project is expected to be completed in September 2024. As of the evaluation base date (June 30, 2023), the project progress is approximately 6.47%.
According to the 2023 half-year report of Zhongtai Chemical, the project progress of Zhongtai New Material Methanol Upgrade Demonstration Project is 19.26%. The disclosure of the two is quite different.
He once invested in the construction of BDO projects, but was voted against by the directors
According to the data, Zhongtai Chemical is engaged in the two main businesses of chlor-alkali chemical industry and viscose textile industry, mainly engaged in four major products of polyvinyl chloride resin (PVC), ion membrane caustic soda, viscose fiber and viscose yarn, supporting the circular economy industrial chain such as thermoelectric, blue charcoal, calcium carbide, calcium carbide slag cement, cotton pulp meal, etc., to build an integrated production system.
In recent years, the performance of Zhongtai Chemical is difficult to say optimistic.
After adjustment in 2019 and 2020, Zhongtai Chemical increased revenue without increasing profit and profitability fell sharply, and the company achieved operating income of 83.144 billion yuan and 84.197 billion yuan respectively, and net profit attributable to shareholders of listed companies was 383 million yuan and 146 million yuan respectively.
In 2022, the company achieved an operating income of 55.911 billion yuan, a decrease of 11.10% compared with the adjusted revenue of 62.893 billion yuan in 2021; The net profit attributable to shareholders of the listed company was 714 million yuan, down 74.02% from the adjusted net profit attributable to the parent of 2.748 billion yuan in 2021.
Looking at the first half of 2023, during the reporting period, Zhongtai Chemical achieved operating income of 20.442 billion yuan, a year-on-year decrease of 30.35%; The net profit attributable to shareholders of the listed company was a loss of 951 million yuan, compared with a profit of 1.145 billion yuan in the same period last year. The company said that the decline in revenue was mainly caused by the company's focus on its main business and actively reduced trade revenue and product prices. In addition, during the reporting period, the net increase in cash and cash equivalents of Zhongtai Chemical was -1.547 billion yuan, down 11495.46% year-on-year. According to the company, it was mainly due to the decrease in cash accumulation and the impact of the financial leasing business on the receipt of other cash reductions and under-funds that were related to the outflow of investment activities.
In addition to the company's performance difficulties, Zhongtai Chemical has also been voted against by the company's directors for investing in BDO-related projects.
On June 8, 2022, Zhongtai Chemical announced that in order to extend the circular economy industrial chain, improve the company's industrial structure, and seize the BDO market, Xinjiang Zhongtai Jinhui Technology Co., Ltd. (hereinafter referred to as Jinhui Technology), the holding company, plans to invest a total of 5.116 billion yuan to build a BDO (1,4-butanediol) project with an annual output of 300,000 tons.
It is disclosed that the project is located in the new area of Baicheng County Industrial Park, Aksu Prefecture, Xinjiang, and plans to build 120,000 tons/year calcium carbide acetylene, 3×10,000 tons/year BDO, 3×24 million tons/year methanol to formaldehyde, 28,000Nm3/h natural gas hydrogen production plant, etc., and the project construction period is 27 months. The source of project funds consists of capital and debt financing, and the company will raise the funds required for the project through the accumulation of undistributed profits and supporting project loans. The average annual operating income of the project is 4.139 billion yuan, and the financial internal rate of return (before tax) is 22.23%.
However, for the construction of the above projects, Zhongtai Chemical director Zhou Yifeng voted against it, the reason for the opposition was: "The company has enough projects, should further refine and strengthen the existing industry, should not blindly follow the trend to invest in the BDO industry".
According to Zhongtai Chemical's 2022 annual report, Jinhui Technology's 300,000-ton BDO (1,4-butanediol) project was approved by the Xinjiang Uygur Autonomous Region Department of Ecology and Environment on the environmental impact report in June 2022, and the project progress was 32.64%. The company's 2023 half-year report shows that the construction progress of the project is 57%.
In addition, the projects under construction disclosed in Zhongtai Chemical's 2023 half-year report include Jinhui Technology's BDO project with an annual output of 300,000 tons, and Zhongtai new material resource comprehensive utilization methanol upgrade demonstration project.
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