Main points of investment:
The company is the first private lubricating oil enterprise listed on the A-share motherboard, with a certain scarcity. The company's existing products include five categories: transformer oil, internal combustion engine oil, hydraulic oil, special solvents and other lubricants, which are used in many industrial and civil fields.
Lubricating oil is mainly used in all kinds of mechanical equipment and vehicles to reduce friction, protect mechanical parts, and play the role of lubrication, cooling, anti-rust, cleaning, sealing and so on. The main raw material of lubricating oil is base oil, which can be divided into I (solvent refining), II (hydrogen cracking), III (hydrogen cracking and wax oil isomerization) and other lubricants according to the processing technology.
The demand of lubricating oil industry is stable, industrial oil is facing negative growth, and automotive oil determines the future demand. Considering the decline of China's industrial growth rate, industrial oil demand is facing the risk of sustained negative growth. The growth opportunity of future vehicle oil demand comes from the maintenance demand brought by the growing age of cars in our country.
The oversupply of raw material base oil in the upper reaches of the lubricating oil industry is obvious, and the prices of Class I and II base oils are upside down. In 14 years, the world base oil production capacity was 56 million tons, with an operating rate of only 63%. The proportion of Class II + III base oil totaled 42%. The massive release of II base oil capacity has led to lower prices than Class I prices for 14 years. Class I base oil production capacity will accelerate to withdraw from the market in the future, but the price tends to be stable.
China's lubricating oil industry is still dominated by two barrels of oil. In 14 years, the market share of two barrels of oil is 44%, with raw materials and capital advantages; multinational brands have a market share of 30%, mainly occupying the high-end internal combustion engine oil market; and there are a large number of private enterprises, with a market share of 27%. However, there are obvious disadvantages compared with the former two in terms of technology, capital, channels and brands, and it is an inevitable trend to increase industry concentration in the future.
The company issued 22.3 million shares at an offering price of 8.50 yuan per share. After deducting the issuance expenses, the issuance fund will be used as the "annual output of 60,000 tons of high-quality lubricating oil project", "R & D center construction project" and "marketing and after-sales service network construction project". At present, the company has obvious advantages in transformer oil, hydraulic oil and other market segments, and the fund-raising project will help the company to expand the automotive lubricating oil market with better prospects, build the company brand and improve the business model.
We estimate that the fully diluted EPS of the company for 15-17 years is 0.40,0.65 and 1.38 yuan per share, respectively. As of December 27, considering the 15-year average dynamic price-earnings ratio of 15-year new shares in the chemical industry (15-year EPS adopted Wande consistent forecast) 96 times, Deluxe Group with part of the lubricating oil business is given a 15-year 40-45 times PE, and the reasonable price of the company is 16-18 yuan.
Special note: the IPO pricing predicted in this report is not the price performance on the first day of listing, but a reasonable price range when the existing market environment remains basically unchanged.
