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苏利转债:成熟的农药和阻燃剂产品提供商

Suli debt-for-money conversion: an established provider of pesticide and flame retardant products

天風證券 ·  Feb 15, 2022 00:00  · Researches

Subscription analysis:

1. Suli's convertible bonds were issued on a scale of 957 million yuan, and the debt and entity ratings were AA-/AA-grade; the conversion price was 20.11 yuan, with a conversion value of 100.9 yuan as of February 11, 2022; the arithmetic average value of annual coupon interest was 1.42 yuan, and the maturity compensation interest rate was 15%, which is a high level of newly issued convertible bonds. Based on the 6.63% discount rate for 6-year AA-grade Chinese bond companies on February 11, 2022, the debt base was 84.60 yuan, and the value of pure bonds was average. Other game terms are market-based terms. If all shares are converted, the dilution pressure on the total share capital and the tradable share capital is 26.44%, there will be a lot of dilution pressure on existing share capital.

2. As of February 11, 2022, the company's top three shareholders, Miao Jinfeng, Ningbo Meishan Free Trade Port Area Gusheng Investment Co., Ltd., and Wang Huanxing, held shares accounting for 40.00%, 10.00%, and 5.00% of the total share capital respectively. The controlling shareholder did not promise priority placement. According to predictions based on the current stage of market development revenue and environment, the first-day placement scale is expected to be around 61%. The remaining amount of new debt purchased online is 373 million yuan. Since the maximum purchase limit for a single household is 1 million yuan, assuming that the number of online subscription accounts is between 1050—11.5 million, the winning rate is expected to be around 0.0032%-0.0036%.

3. The company's industry is in pesticide (Shenwan Level 3). From a valuation perspective, as of the close of trading on February 11, 2022, the company's PE (TTM) was 16.13 times, lower than the industry average among 10 peer companies with similar income, with a market capitalization of 3.652 billion yuan, lower than the peer average. As of February 11, 2022, the company's underlying stock has risen 5.79% since this year, the industry index fell 8.11% during the same period, Wandequan A fell 8.34%, and the weekly annualized volatility of the past 2 years was 28.38%, and stock elasticity was low.

The company currently has no equity pledge risk. Other risk points: 1. Risk of product price fluctuations; 2. Risk of fluctuations in raw material prices; 3. Environmental protection and production safety risks; 4. Risks that the implementation of fund-raising projects does not achieve expected benefits, etc.

4. Suli's convertible bonds are small in scale, and the debt base protection is average. The parity price is higher than face value. The market may give a 27% premium. The estimated listing price is around 128 yuan. It is recommended to actively participate in the purchase of new bonds.

Risk warning: risk of default, risk of convertible bond prices fluctuating or even below face value, risk of issuing convertible bonds that cannot be converted to shares at maturity, risk of diluting earnings per share and return on net assets, risks associated with this convertible bond conversion, risk of changes in credit ratings, risk of underlying stock fluctuations, and listing income premiums falling short of expectations

The translation is provided by third-party software.


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