Core viewpoints
The company is committed to becoming a world-class special polymer material enterprise, and its production capacity is about to be released. The company started with modified and general plastics and is speeding up the transformation to a special polymer material enterprise in recent years. The company has three bases in East China, South China and Chongqing, which is about to usher in the production capacity release period. It is estimated that by 2025, the company will have 13000 tons of fluoropolymer, 25000 tons of LCP, 10 thousand tons of PPA, 10 thousand tons of PSF, 2 thousand tons of PAEK polymerization and 20 thousand tons of PPS modification capacity, the increase of the first five capacity is 333%, 400%, 100%, 400% and 100% respectively. From 2018 to 2021, the company's revenue continued to grow, and in the first half of 2022, due to the disturbance of the epidemic, high crude oil prices, insufficient supply of core raw materials of special polymer materials and other reasons, the company's performance was under pressure. the company now has the ability to guarantee the supply of multi-channel LCP raw materials, which can meet customer demand in all directions and is expected to usher in a reversal of performance.
Special polymer materials to meet the tide of domestic substitution, the company's production capacity is expected to leap to the forefront of the world. With the great development of 5G and new energy, the market space of special engineering plastics continues to expand. The 14th five-year Development Guide of the Petroleum and Chemical Industry clearly points out that we will strive to raise the self-sufficiency rate of engineering plastics and special engineering plastics to 85% in 2025. Under the general trend of domestic substitution, China's special polymer materials enterprises have ushered in important opportunities for development.
On the supply side, developed countries have a high say in LCP, PPA, PSF, PAEK and other products.
After the company has been built and put into production, the company is expected to become the second LCP producer in the world, with a capacity scale second only to Celanese, PPA and PSF capacity ranking in the forefront of China, and excellent product quality. PPA products in the field of smart wear and VR equipment have been designated as the first-class supplier of customers, and also cooperate with a number of customers on PPA in the thermal management of new energy vehicles and Sandian. PAEK, PPS and other products are also in high demand, and the company is expected to continue to benefit from accelerating technological breakthroughs in the future.
The high-goal equity incentive plan demonstrates long-term development confidence, and together with the Chinese Academy of Sciences, we look forward to the follow-up efforts in the field of synthetic biology. In 2022, the company launched the stock option incentive plan from 2021 to 2025. Based on 2021, the average annual compound growth rate of revenue and net profit in the next four years is not less than 50% and 60%, respectively. The setting of high equity incentive targets is based on the company's capacity release and R & D strength, demonstrating the company's long-term development confidence. The company has always attached importance to research and development. In 2022, it signed with Shenzhen Institute of Advanced Technology of the Chinese Academy of Sciences to establish a joint innovation center for synthetic biochemical applications. The joint innovation center is the only joint innovation center called "synthetic biochemical applications" established by Shenzhen Advanced Institute in foreign cooperation. The two sides will mainly focus on bio-based polymer materials, animal and plant applications and other aspects of cooperation, the later results are worth looking forward to.
Investment suggestion
Domestic special polymer materials to meet the development opportunity, the company's raw material problems to alleviate the superimposed production capacity, the performance is expected to usher in a reversal. We estimate that the return net profit of 2022Universe 2023Company2024 is RMB 0.21, 000,000,000,000, respectively, and the corresponding EPS is 1.48RMB per share, respectively. Based on the closing price of 18.94 yuan on February 27, 2023, the corresponding PE is 12.86 times that of 209.53. 43.41. Combined with the prosperity of the industry, we are optimistic about the development of the company. Cover for the first time and give a "recommended" rating.
Risk hint
Project construction and commissioning are not as expected; raw material supply stability and prices fluctuate greatly; downstream demand is lower than expected.