With the increasingly stringent requirements of the national environmental protection policy, the market attention of environmental protection concept stocks has also been increasing in recent years. Jiangsu Innovation Environmental Protection New Materials (02116), one of the five major domestic operators of oil refining auxiliaries and oil additives, began to issue shares, raising up to 150 million yuan. The market placement part has been oversubscribed, the sponsor is Oriental financing, and the underwriter is Guotai Junan, which is nearly four times oversubscribed on the first day of the public offering.
Zitong Financial APP has learned that Jiangsu Innovation Environmental Protection has issued a total of 120 million shares, 90 per cent of which is an international placement and 10 per cent is a public offering; the share price is between 1 and 1.25 yuan per share, with an admission fee of 2525.19 yuan per share. The stock will close at noon on the 22nd and officially enter the Hong Kong stock market on March 28.
The industry leader relies on the concept of environmental protection
According to the prospectus, Jiangsu's main business of innovative environmental protection is the development, production and marketing of refining auxiliaries and oil additives that are mainly used to reduce undesirable emissions and meet evolving regulatory requirements. It is one of the first in the industry to enter China's oil refining auxiliaries and oil additives industry.
Under the background of increasingly stringent domestic environmental laws and regulations, although Jiangsu's innovative environmental protection has failed to cut from the root of energy like new energy concept stocks such as BYD (01211) and Oliss (00860), the company has found a new direction in emission reduction, that is, the production of new environmentally friendly materials. At present, the company has becomeOne of the five major operators of domestic oil refining auxiliaries and oil additives industryAccounting for about 1.7% of the market share.
From the financial situation in recent years, the company's earnings, gross profit and net profit have increased significantly in the three years from 2014 to 2016. Income increased from 105 million yuan to 136 million yuan, with a compound annual growth rate of 13.6%, gross profit from 40.612 million yuan to 61.136 million yuan, and net profit from 16.42 million yuan to 33.346 million yuan over the same period:
In terms of products, Jiangsu's innovative and environmentally friendly main product refining auxiliaries are used to refine crude oil, prolong the service life of refineries, improve economic efficiency and reduce unnecessary industrial waste emissions from refineries, while another major product oil additive is used to help customers comply with increasingly stringent mandatory emission regulations while maintaining fuel quality and efficiency.
As shown in the table below, the sales and distribution of refining auxiliaries accounted for 71.8% of the company's revenue in the six months ended June 30, 2017, which, although slightly lower than in the past few years, is still the company's main product:
The characteristic of this product is that it can help petrochemical enterprises to produce products that meet the increasingly stringent domestic emission and fuel quality requirements, and meet the green production needs of oil refineries. It is precisely because of this characteristic that the company has a long-term and solid cooperative relationship with the enterprise customers of the three major petrochemical companies in the mainland, China Petroleum & Chemical Corp, Petrochina Company Limited and CNOOC.
The sales and distribution of oil additives, another major product category of the company, accounted for 28.2% of the company's revenue in the six months to June 30, 2017, which is basically in the trend of sustained growth in the past few years, and is also a major focus of the company's future development. When it comes to oil additives, the "sixth National" standard has to be hotly discussed in the entire automobile market some time in advance.
The sixth national standard brings new opportunities.
When the "sixth National Day" went out, there was no grass growing. The impact on the automobile market brought by the "National five-year Plan" has not stopped, known asThe strictest environmental protection order in historyThe sixth National Day is coming again.
First of all, give popular science to the young people who are not clear about National 6. Generally speaking, "National 6", coupled with the previous "National 5" and "National 4", all refer to the emission standards of automobile exhaust. Once more stringent standards are implemented, some motor vehicles with excessive emissions even have the risk of being banned from the road.
Fortunately, this "National 6" adopts a step-by-step policy, which is divided into two stages: "National six a" and "National six b", which is formulated by the state in order to give the automobile industry a certain buffer time. Among them, "country 6 a" is equivalent to a transitional stage of "country 5" and "country 6". "country 6 b" is the real "country 6" standard, which is expected to be implemented in stages in 2020 and 2023 respectively.
Of course, the release of the "sixth" policy affects not only the automobile industry, but also the petrochemical industry to improve the quality of oil products under the policy requirements, which is closely related to the oil refining auxiliaries and oil additives mentioned above.
Careful investors may have found that since 2017, the familiar 97Compact 93 of gas stations has become 95Cand92, and the gasoline label has been lowered. Petrochina Company Limited and China Petroleum & Chemical Corp's gasoline price has instead become higher, which means a decrease in octane number. The increase in price is partly due to the increase in the cost of oil refining auxiliaries and oil additives.
So before the implementation of the "sixth National" regulations in 2020, the "sixth National" gasoline standard must be implemented ahead of schedule. I wonder if 95thumb 92 will become 94cyan91 at that time. How much should the oil price rise? But there is no doubt that the demand for refining auxiliaries and oil additives will certainly increase greatly.
With a substantial increase in potential demand, Jiangsu, the industry leader in innovation and environmental protection, naturally needs to consider increasing production capacity. The company also mentioned in the prospectus that the purpose of this fund-raising is mainly in two aspects: first, it is used to upgrade the Yixing plant and expand production capacity. The company has received regulatory approval to build a production facility with a capacity of 25000 tons.
On the other hand, the money will also be used to build production facilities to produce raw material substitutes that the company needs to import from overseas for the production of diesel antiwear agents, which will help reduce its raw material costs. this shows the company's confidence in the growth of demand for products in the future.
Backed by the concept of environmental protection, and the affiliated enterprises of the three major petrochemical companies as their long-term customers, coupled with the increase in the demand for refining auxiliaries and oil additives brought about by the "sixth National" regulations, Jiangsu, as one of the industry leaders, innovation and environmental protection will usher in new opportunities for development.