Main points of investment:
Domestic smart card substrate leading enterprises. The company is a leading supplier of functional plastic diaphragm materials in China. after years of exploration and research, the company has developed into one of the enterprises with the largest production scale, the highest product grade and the most complete range of products in the domestic medium-and high-grade smart card substrate industry. At present, the company mainly produces more than 20 series of smart card substrate products and new bio-environmental protection materials, such as PVC, PETG, ABS, PHA, etc., which are used in finance, transportation, medical treatment, electronic information, social security, security, decoration, packaging and other fields.
Functional plastic diaphragm materials are widely used. The company belongs to the functional plastic diaphragm material manufacturing industry, functional plastic diaphragm materials can be used in building materials, packaging, electronics, medicine, automotive, business card printing and other industries. The upstream suppliers of the company are chemical enterprises that produce all kinds of basic polymer raw materials, and the customers in the downstream industry are smart card production enterprises and institutions. At present, they are mainly for all kinds of smart card manufacturing enterprises and government certificate production units. The company's main competitors are Shanghai Dakai Plastics Co., Ltd., Shanghai Youpu plastic Co., Ltd., Changzhou Wujin Baixing plastic products Co., Ltd., Jiangyin Zhongka New Materials Co., Ltd.
The production and marketing situation is relatively optimistic, PVC business occupies a dominant position. The production and marketing situation of the company is relatively optimistic. From 2015 to 2017, the average production and marketing rate of the company's main products is 98.33%, 100.07% and 93.63%. Among the company's main products, PVC products contributed 200.0473 million yuan in operating income in 2017, accounting for 70.48 percent of revenue, 3.82 percent lower than in 2016, 43.4319 million yuan in gross profit and 51.73 percent in gross profit, down 14.27 percent from 2016. In 2017, PETG products contributed 79.8605 million yuan in operating income, accounting for 28.14 percent of revenue, an increase of 3.56 percent over 2016, a gross profit of 40.0062 million yuan, and a gross profit of 47.65 percent, an increase of 14.28 percent over 2016. ABS products contributed 3.4075 million yuan in revenue in 2017, accounting for 1.2% of revenue. In 2017, PHA products contributed 484800 yuan in operating income, accounting for 0.17% of revenue.
Fund-raising projects are used for production expansion and technological construction to enhance core competitiveness. The funds raised by the company's initial public offering are mainly used for the following projects: (1) the annual output of 8000 tons of smart card substrate project, the total investment is expected to be 161.525 million yuan, the amount of capital raised is 106.7182 million yuan, and the construction period is 24 months. (2) the annual output of the functional polyester film project is 4000 tons, the total investment is expected to be 59.038 million yuan, the investment amount raised is 49.038 million yuan, and the construction period is 24 months. (3) the total investment of the R & D center project is expected to be 44.25 million yuan, the investment amount raised is 44.25 million yuan, and the construction period is 12 months.
Profit forecast. We estimate that the EPS of the company after dilution in 18-20 years is 0.81,1.01,1.14 yuan respectively. At present, the company is a secondary new stock, and its valuation is too high, so it will not be rated for the time being.
Risk hint. The risk of rising raw material prices, the risk of falling gross profit margin, the risk of technology leakage, and the risk that fund-raising projects fall short of expectations.