Main points of investment:
High-performance plastic resin manufacturing enterprises, deep ploughing in the field of modified plastics. The company's main products include halogen-free flame retardants, modified plastic particles and products, which are widely used in holiday lighting, electronics, wires and cables, automobiles, medical and health and other fields. At present, many production bases have been formed in Qingyuan, Guangdong, Wuhu, Anhui and other places.
In 2019, the company has a production capacity of 10220 tons / year for flame retardants, 59062.86 tons / year for modified plastic particles and 31200 tons / year for PS diffusion plates. In 2020, the company's total operating income was 1.924 billion yuan, an increase of 30.53% over the same period last year, and the non-return net profit was 159 million yuan, an increase of 69.05% over the same period last year.
Flame retardant modified plastics have passed the UL certification of the United States, and there is a wide demand in the downstream market. In terms of flame retardants, the company's halogen-free flame retardant customers include the well-known chemical company AkzoNobel (Akzo Nobel). We believe that with the growth of new energy vehicles and 5G market, as well as the increasing requirements for flame retardant safety, we believe that the company's phosphorus and nitrogen flame retardants will further open up the market. In terms of modified plastic particles, the company's main customers include Midea, FAW-Volkswagen and other enterprises, holiday lighting products are mainly exported to Europe and the United States and other countries; in terms of modified plastic products, the company's related products include PS diffusion plates, and the main customers include Samsung, LGE and other companies. The flame retardant modified plastic particles independently developed by the company have passed the UL certification of the United States and have absolute export advantages.
Develop recyclable industries and degradable plastics. At present, the company focuses on the distribution of recyclable industries and biodegradable plastic products. In the field of plastic recycling, the company plans to promote the turnover materials used in construction sites by renting and selling, so as to realize the recovery and reproduction of building formwork; in the field of degradable plastics, in addition to the deeply ploughed PVA water-soluble degradable materials and products, the company will also introduce biodegradable plastics such as PBAT and PLA. At the same time, the company is laying out and developing the production and sales of degradable membrane materials, recyclable plates and recycled thermal insulation turnover boxes.
The company actively expands its production capacity by raising funds to enhance its ability of sustainable development. 1) Chizhou halogen-free flame retardant expansion construction project. The total investment of the project is 1.2 billion yuan, and the planned construction period is 6 years, which is divided into two phases. The construction period of the first phase is 3 years, and the construction period of the second phase is 3 years. In the next step, the company intends to merge into the upstream industry of flame retardants, reduce the profit risk caused by raw material fluctuations, and develop the raw material supply chain of the new energy industry. 2) Chizhou polystyrene production and construction project and Changzhou LCD light guide plate and diffusion plate project. The investment of the Chizhou project is 174 million yuan, and the construction period of the first phase is 36 months. the project will provide raw materials for Changzhou with an annual output of 94000 tons of light guide plate and diffusion plate.
Profit forecast and investment rating. We predict that the return net profit of the company from 2021 to 2023 is 166 million yuan, 223 million yuan and 298 million yuan, and the EPS is 1.78,2.39,3.19 yuan. With reference to companies in the same industry, we think that the reasonable valuation is 2021 PE 20-25 times, the value range is 35.60-44.50 yuan, the first coverage is better than the big city rating.
Risk tips. The upstream and downstream demand is less than the expected risk, and the fund-raising and production capacity is less than the expected risk.
