The readings of this report are as follows:
The company focuses on the main fine chemical industry, and the development of new business is accelerated. Ruiheng new material C 3 project is expected to be gradually put into production in 2022, which will provide an important performance increment for the company.
Main points of investment:
The target price is 12.70 yuan, covering and increasing the holdings for the first time. We estimate that the EPS of the company in 2021 and 2023 will be 0.94, 0.57 and 1.04 yuan respectively, with a growth rate of + 746%,-39% and + 82%, respectively. Combined with comparable company valuation, comprehensive PE and PB valuation, the target price is 12.70 yuan. Cover and increase holdings for the first time.
The strategy focuses on the main business of fine chemical industry, and the development of new business is accelerated. In recent years, the company has continued its strategic transformation, from trade to the main fine chemical industry. 6PPD, dichlorobenzene and nitrochlorobenzene are among the top three in the world, while epichlorohydrin and epoxy resin are in the lead in China. The company continues to focus on epoxy resin, polymer additives and other core industrial chains, continue to promote the strong chain complement chain extension chain, the total amount of projects under construction and fixed assets are increasing year by year, and key projects are promoted in an orderly manner.
The green carbon 3 project has outstanding competitive advantages and will be gradually put into production in 2022. Ruiheng new material C 3 project plans 600000 tons of PDH, 650000 tons of phenol / acetone, 240000 tons of bisphenol A, 400000 tons of PO and 150000 tons of ECH. The development of the wind power industry has led to the rapid growth of the demand for epoxy resin. The demand for epoxy resin for wind power blades is about 420000 tons in 2020. The project adopts green processes such as HPPO and hydrogen peroxide ECH, and the core products have outstanding competitive advantages. it is estimated that the profit of all new projects will exceed 2 billion yuan at full load.
The market potential of para-aramid is great, and the production capacity of the company ranks first in China. Para-aramid has the characteristics of high strength and high modulus, which is widely used in optical cable, bulletproof protection, friction sealing and other fields. The domestic demand for para-aramid is more than 10,000 tons, and more than 80% of the market share is occupied by large international companies, and there is plenty of room for import substitution in the future. The company's 5000-ton counterpoint aramid project has been successfully put into production and is expected to produce more than 2000 tons in 2021. In addition, the company continues to promote the layout of the lower reaches of the industrial chain.
Risk tips. The progress of the project is not as expected, the demand is not as expected, and the price of raw materials fluctuates greatly.