The core technology leading fine chemical enterprises, C9 aromatics comprehensive layout is basically formed: the company extends the upstream and downstream development of C9 whole industry chain. The raw material end gradually changed from purchasing metatoluene to purchasing reforming C9. After distillation, we can produce intermediate products such as metatoluene, toluene isomers, high boiling point aromatics, and independent research and development of high-end environment-friendly plasticizer TOTM, vinyl toluene monomers and high boiling point aromatics solvents. At present, TMA and TOTM are the company's main profitable products, accounting for 70% and 11% of gross profit respectively. During the introduction period of vinyl toluene, the profit contribution is less but the growth potential is great.
With the coordinated development of TMA and TOTM, high-end environmental substitution is the main direction: the fine utilization rate of domestic reforming C9 aromatics is only 25-30%, and the downstream is dominated by blending and extraction. Relying on the advantages of TMA and TOTM products, the company gradually takes C9 as the main raw material. In terms of downstream demand, it is estimated that in 2020, the world consumption of metformin will reach 230000 tons, the domestic consumption will reach 129000 tons, and the TOTM consumption will reach 153000 tons. Non-toxic TOTM has obvious advantages in the fields of food and medicine, wire and cable and strong consumption, and has great potential to replace o-benzene plasticizers to realize plasticizer consumption transformation in the future. Vinyl toluene is the only American Daike and the company has large-scale production technology, the future development of high-end areas of styrene replacement is expected to open up room for growth.
Fund-raising projects consolidate their position in the industry, and environmental regulation promotes downstream transformation: TMA is mainly concentrated in four domestic enterprises, with an actual output of about 50,000 tons, accounting for 50%. This investment of 40,000 tons / year trimellitic anhydride project will further consolidate the industry position. Excluding the output for self-use, the utilization rate of the company's main capacity continues to exceed 100%, and the prospect of fund-raising projects is promising. In addition, driven by national environmental protection laws and regulations, the company directly benefits from benzene-like environmental protection products. It is estimated that China's total consumption of plasticizers in 2020 will reach 3.65 million tons, and the market share of meta-benzene (about 100000 tons) will continue to expand.
Investment suggestion: the company's EPS in 2017-2019 is expected to be 0.54,0.70,0.86 yuan respectively. For the first time, the investment rating of increasing holdings-An is 20.0 yuan, corresponding to 37 times, 29 times and 23 times of PE in 2017-2019.
Risk hint: competitors' continuous price war, etc.