The company is a characteristic fluorine fine chemical industry chain layout enterprise. Since its establishment, the company has been focusing on fluorine-containing intermediates in medicine and pesticides. After listing in 2017, we will use the raised funds to expand the variety of intermediates and enter the field of new materials for BPEF. Since then, on the one hand, the company has expanded its new material products, from a single BPEF to DFBP, TFMB and other products; on the other hand, it has extended the industrial chain, issuing shares to acquire Gaobao Technology and its subsidiary Changxing Fluorite in 2019, and increasing the construction of Gaobao Technology Fluorine Fine Chemicals expansion Project in 2021. The company has become a characteristic fluorine fine chemical industry chain layout enterprise.
The two core advantages build competitive barriers. First, the fluorine chemical industry chain has a high degree of integration. The company extends upstream fluorite and hydrofluoric acid through the acquisition of Gaobao technology. Gaobao technology anhydrous hydrofluoric acid has obvious cost advantages, and 30,000 tons of photovoltaic grade hydrofluoric acid has been planned to enhance the added value of the products. The company fills the vacancy in the industrial chain through the fluorine fine chemical expansion project. Among them, the main product fluorobenzene is the most basic aromatic fluoride raw material, which is sold outside the synthetic DFBP for self-use. It is also expected to extend other pharmaceutical and pesticide intermediates with the help of fluorobenzene in the future, making profits or exceeding expectations. Second, the process technology is leading and inheriting. Each generation of key products of the company are born from the previous generation of core technologies, and on this basis to develop and cultivate new synthesis and engineering technologies to form inherited and evolving process-product clusters.
The business of medical and agricultural intermediates is expected to grow steadily. The main pharmaceutical intermediates are quinolone intermediates, and the increment is mainly nenofloxacin cyclic acid supplied to Zhejiang medicine. At present, the main pesticide intermediates are permethrin intermediates, with an increment of 500t 2helium 6-difluorobenzamide (used in benzoylurea pesticides and triazopyrimidine sulfonamide herbicides). It is expected that the annual income will increase by 270 million yuan and the net profit will be 40 million yuan.
There are many products in stock of new materials, which opens the second growth curve. While maintaining the competitive advantage of pharmaceutical and pesticide intermediates, the company actively carries out the research and development of display materials, engineering plastics, new energy chemicals and other new materials relying on the existing process technology, which is expected to open the second growth curve. At this stage, the main product of the company's new material business is BPEF, and the products under construction include DFBP, TFMB, supercapacitor electrolyte, etc., which will be gradually increased in the next 3-5 years.
In addition, we believe that the company is expected to make a breakthrough in the new generation of fluorine-containing new energy chemicals.
Investment suggestion: we predict that the annual return net profit of the company in 2021-22-23 is 1.83, 2.77 / 389 million yuan, EPS 0.90, 1.36, 1.91, corresponding to the current price of PE 34.36, 22.69, 16.18 times. We are optimistic that the company's deep technology accumulation based on fluorine fine chemicals will continue to expand to the field of new materials, and the volume of photovoltaic hydrofluoric acid, BPEF, DFBP and new energy chemicals will be gradually increased in the next few years. We give the company 20 times PE in 2023, with a target price of 38.1 yuan. Cover for the first time, giving a "buy" rating.
Risk tips: fluorite, hydrofluoric acid price fluctuations; new material capacity release is not as expected.