Items:
Recently, we went to the company to conduct research and exchange on the operation situation.
Main viewpoints
1. The transformation of fine chemical R & D manufacturers, product lines continue to extend to form a strong product echelon after asset restructuring in the previous two years, the company divested the original household goods business and completely transformed into fine chemical R & D manufacturers such as pharmaceutical intermediates. After the acquisition of plastic supply chain e-commerce platform "plastic rice net" in 16 years, the organizational structure of "special technology-R & D and production", "plastic rice information-supply chain e-commerce" and "parent company-capital operation" has been formed. Lin's family, the former shareholder of Guanfu, is still the actual controller of the listed company, and Chen Liequan, chairman of Yuan Neng, has become the largest shareholder. The subsidiary Nengte Technology, jointly developed by Dr. Cai Dongwei and Chen Liequan of the Thousand talents Plan, has great technical and cost advantages in the production and manufacturing of VE, and will continue to extend to the fields of vitamin A, K3 and PPO, with a strong product echelon.
two。 The whole industry chain layout VE production, the new process cost significantly reduces the company's existing VE (oil) production capacity of 20,000 tons (40,000 tons) load nearly 90%. The most important raw materials used in VE production include trimethylhydroquinone and isophytic alcohol: (1) the production capacity of trimethylhydroquinone is 8000 tons, which is produced by self-developed xylene method, covering the whole industry chain of "dimethylphenol-trimethylphenol-trimethylhydroquinone". The estimated cost is 40% lower than that of the traditional m-cresol method. (2) the company has a production capacity of 20,000 tons of isophytic alcohol, and initiated the independent research and development of the C15 farnesene method in 16 years, with an estimated cost 30% lower than the traditional production method, and obtained the exclusive purchase right of Amyris, the only biologically fermented C15 farnesene manufacturer in the world, and participated in Amyris4% shares to ensure stable cooperation. The overall production cost of the company is more than 30% lower than the industry average, and its production capacity has changed the competitive pattern of the industry. We expect that the small production capacity of external mining intermediates will be gradually withdrawn in the future. Guanfu, DSM, BASF, Xinhe Cheng and Zhejiang Pharmaceutical will strengthen their control over the global VE market, and the company is expected to continue to make profits by relying on low costs.
3. Affected by the explosion at the BASF citral plant, VE recently saw a sharp rise in prices. The BASF citral plant exploded on October 31, accounting for more than 70 per cent of the world, and announced the declaration of force majeure of VA and VE on November 10th. At present, BASF has a production capacity of 20,000 tons of VE (oil), accounting for 16% of the total global production capacity. The prices of related products have risen sharply at home and abroad, and the price of domestic products has also risen to 85000 yuan / ton. Several major manufacturers have stopped quoting, and prices are expected to rise further. According to the company's existing production capacity of 40, 000 tons of powder, for every 10, 000 yuan / ton, the company's performance will increase by 290 million yuan.
4. The reserve of low-cost PPO monomer production technology is expected to become a growth point in the future. PPO (polyphenylene oxide) is one of the five general engineering plastics in the world. MPPO formed by blending with other plastics is the most important application in the downstream. The technical level of China in related fields has a great gap compared with that of overseas. In the past 15 years, China has a production capacity of 9900 tons of MPPO, an output of 9200 tons and a consumption of 23000 tons, which needs a lot of imports. The company has completed the process research and development of PPO in 16 years, and the production cost of monomer (2j6-dimethylphenol) can be 30% cheaper than that of its counterparts, and it has been put into production of 7000 tons of 2jin6-dimethylphenol in 16 years, with a co-production of 3000 tons of o-cresol (used as pesticide intermediates). The company expects the project to contribute 150 million yuan in annual income and an increase of 20 million net profit. The company continues to promote PPO product development, which is expected to become an important product supplement for the company in the future.
5. Investment advice:
Assuming that the plastic rice net can fulfill the performance commitments of 1.5,225 and 300 million yuan in 17-19, and according to the conservative estimate of the price of 60,000 yuan per ton of VE powder in 18 years, the company's net profit in 17-19 years is 2.8,11 and 1.58 billion yuan respectively, and the corresponding EPS is 0.11,0.42,0.6. at present, the corresponding PE is 43,11,8 times, and according to the production capacity of 40,000 tons of powder, it will increase by 10,000 yuan / ton. The company's performance will be thickened by 290 million yuan, recommended rating.
6. Risk Tips:
There is something wrong with the operation of the new vitamin E factory; the plastic rice net is unable to meet the performance promise.