Ethylene oxide deep processing leading enterprise. Cologne refined mainly engaged in ethylene oxide derivatives research and development, production, sales, the company's main products include polyether monomer, polycarboxylic acid superplasticizer, crystal silicon cutting liquid, etc., the company's polycarboxylic acid superplasticizer domestic market share of about 6%. In 2013, the company's polyether monomer and polycarboxylic acid superplasticizer accounted for 53% and 42% of the company's revenue, respectively, and were the main sources of revenue and profit.
Revenue declined from 2011 to 2013. From 2011 to 2013, the company's polyether monomer income fluctuated, the revenue of polycarboxylic acid superplasticizer was relatively stable, and the revenue of crystal silicon cutting fluid dropped sharply, which led to a continuous decline in company revenue. 1H2014, with the recovery of the photovoltaic industry, the company's crystal silicon cutting fluid increased by 117% compared with the same period last year, and the company's performance improved to a certain extent. In the past few years, the company's gross profit margin fluctuated between 14% and 22%, in which the gross profit margin of polyether monomer and polycarboxylic acid was relatively stable, and the gross profit margin of crystalline silicon cutting liquid fluctuated greatly.
High growth rate of polycarboxylic acid superplasticizer industry. From 2006 to 2012, the domestic consumption of concrete superplasticizer increased from 1.79 million tons to 6.01 million tons, which increased by about 2.4 times. as the third generation superplasticizer, polycarboxylic acid superplasticizer has better performance and more environmental protection. its consumption increased from 150000 tons to 2.3 million tons (20% content), which increased by more than 14 times in six years, and its proportion in superplasticizer increased from about 8% in 2006 to about 38%. However, there is still a gap with the level of more than 65% in developed countries, and we expect the consumption of polycarboxylic acid superplasticizer to grow by more than 20% in the future.
The fundraising project will strengthen the company's position in the industry. The company plans to issue 17 million shares, raising no more than 280 million yuan, mainly investing 100000 tons / year polycarboxylic acid superplasticizer and 30, 000 tons / year polyether monomer or crystal silicon cutting liquid. By mid-2014, the company has a polyether monomer or cutting liquid production capacity of 120000 tons per year, and polycarboxylate superplasticizer capacity of 70, 000 tons per year. After the fund-raising project is put into production, the company's position in the field of ethylene oxide deep processing will be strengthened.
It is recommended to apply for purchase. We estimate that the EPS of Cologne Fine Chemical from 2014 to 2016 will be 0.79,0.98,1.33 yuan respectively. With reference to the valuation of comparable listed companies, we think that it is reasonable to give the company a dynamic PE of 25-30 in 2014, corresponding to the reasonable value range of the company is 19.75-23.70 yuan, and the company's offering price is 16.45 yuan.
Risk tips: 1) main raw material supply and price fluctuation risk; 2) market risk; 3) fund-raising project risk.
