Main points of investment:

The company is a leading company in the fine molecular industry, mainly engaged in the production and sales of butyl acetate and trimellitic anhydride; the company has the advantage of scale in production. At the end of 2009, the company has a production capacity of 100000 tons of butyl acetate and 10, 000 tons of trimellitic anhydride. The above two products currently account for 30% and 20% of the domestic market respectively.

A positive view of the company:

The company's main products have a certain scale and cost advantage in China in terms of sales and production capacity, in which butyl acetate has the first market share and trimellitic anhydride has the third market share in China; the product quality and enterprise reputation in the industry have advantages; butyl acetate products participate in the revision of national standards; trimellitic anhydride is the maker of national standards.

As a leader in the industry, the customer base is stable, and the company is the main supplier of Akzo Nobel, B ASF, P PG, DSM and Ribang (accounting for 70-80% of the supply). The capacity utilization of butyl acetate and trimellitic anhydride is close to 90%.

The company uses advanced reactive distillation to produce butyl acetate continuously, which has low energy and high efficiency, reducing energy consumption by 50%, power consumption by 35% and wastewater discharge by 50%, which makes the gross profit level of the company much higher than that of the industry.

With the implementation of relevant laws and regulations such as "Code for Indoor Environmental pollution Control of Civil buildings" and "limit of harmful substances inside", butyl acetate will have a substitute demand for restricted products in the future, and the market growth space is expected to open.

TOTM made from trimellitic anhydride has good temperature resistance, aging corrosion resistance, volatilization resistance and precipitation resistance. With the gradual improvement of the safety requirements for electrical insulation materials and engineering plastics in our country in the future, and in the field of disposable infusion, syringes and blood bags, the demand for trimellitic anhydride is expected to increase.

The pricing of the company's products fluctuates with the prices of major raw materials, and the cost risk can be transferred.

Negative view of the company:

The market maturity of the main products is high, the production capacity of butyl acetate is rich, while the capacity of trimellitic anhydride is expanding rapidly, and the industry is facing fierce competition.

More than 80% of the company's sales revenue comes from butyl acetate, which is mainly used in paint solvents, and the demand growth rate is expected to be about 7% in the next two years, and the industry demand growth rate is relatively unattractive; moreover, the national regulation and control of the real estate industry may last for a long time, which will have a negative impact on the growth of demand for coatings (including home decoration and automobiles, etc.), thus affecting the demand for paint solvents