Research content

Recently, we conducted a survey of Buddha Plastics Technology and exchanged views with senior executives on the current business situation and future plans. the overall operation in the first three quarters was stable, and it will take time for the performance to pick up.

Main viewpoints

The BOPET business remains in the doldrums, and the return on investment has not improved.

DuPont owns 49% of DuPont Hongji and 24% of DuPont Teijin respectively. DuPont mainly sells high-end BOPET films. The investment income contributed to the parent company's net profit in 2010 and 2011 accounted for 77% and 23% respectively. Excluding the investment income from the parent company's sale of Jinhui's high-tech stake in 2011, DuPont's investment income accounted for more than half of the company's net profit. Due to the disorderly expansion of the BOPET business, it will take time for the economy to reverse, and there is no significant improvement in profit in the third quarter. The profit of the company's main business for the whole of 2012 is determined to decline significantly.

The second phase production capacity of lithium ion battery separator is put into production.

The company's existing lithium-ion battery diaphragm production capacity of about 22 million square meters, the second phase of the planned production capacity of 25 million square meters in the end of the third quarter of this year into production. Due to the low capacity utilization in the early stage of production, it is expected that the second-phase production line will not have a significant impact on the annual performance. The commissioning and commissioning of the second phase of the production line has accumulated empirical data for the third phase of the production line. It is estimated that the third phase of production capacity of 25 million square meters is expected to be put into production in 2013, and the growth of Jinhui Hi-Tech is accelerated.

The real estate business will continue to contribute to profits

As of mid-2012, the company's light industry No. 3 land has completed a pre-salable area of 44000 square meters and has pre-sold 20, 000 square meters. Considering the surrounding market, the price of the property is about 9000 yuan per square meter. we estimate that the pre-sold area can contribute about 80 million yuan to the company's net profit, and the net profit corresponding to the pre-selling area is about 180 million yuan.

The main business awaits recovery and maintains a "neutral" rating

The company's main business has yet to recover, and the real estate business will make a large contribution to the net profit, but the settlement time for the completion of the real estate business is uncertain and the sustainability is unknown. The company's late growth depends on re-project development, and there is no profit recovery in the short term. It is estimated that the company's EPS in 2012, 2013 and 2014 will be 0.09,0.17,0.30 yuan respectively, corresponding to the latest closing price PE of 46.5,23.1,13.3 times. Maintain a "neutral" rating.

Risk hint

The regulation of the real estate market leads to poor sales of pre-sellable properties, which affects the cash position of the company.