Domestic polyurethane foaming agent leader, products driven by downstream are expected to achieve rapid growth
Polyurethane foam is the most important polyurethane products, accounting for about 60% of the total polyurethane products. Its downstream applications are very extensive, including refrigeration and thermal insulation, furniture, automotive, construction, electronic communications, military and other fields. The demand is increasing day by day. According to the company's prospectus, global demand for polyurethane will grow by 4.5% over the next 10 years, while emerging Asia-Pacific countries, including China, are likely to grow by more than double digits, supported by new technology-driven downstream applications. The company is the leader of polyurethane foaming agent in China, and its main products include hard foam and soft foam leveling agent. as the foaming agent is a key additive in the production of polyurethane foam, driven by downstream demand, related products are expected to achieve rapid growth in performance.
There is more room for development of the products, and we look forward to the increase of starting load brought by the market development in the future.
In the field of hard foam homogenizer, relying on strong R & D strength, the company has broken the monopoly of multinational enterprises on the domestic market, and by virtue of high performance-to-price ratio and local service advantages have gradually become the mainstream products in the hard foam homogenizer market. From 2014 to 2016, the domestic market share of this series of products was 21.0% 18.3% and 17.3% respectively. In the field of soft foam leveling agent, the domestic market share of the company's products from 2014 to 2016 are 4.0%, 3.8% and 3.8%, respectively, and there is still a lot of room for development in the future. In terms of overseas markets, the market share of hard foam and soft foam homogenizer in foreign countries in the past 16 years is 5.4% and 1.5% respectively, which is relatively low, so the development of foreign markets is expected to become a breakthrough for the company's future development. From the perspective of capacity space, the company's total production capacity of foaming agent has reached 21000 tons after relocation and expansion, of which the production capacity of hard foam and soft foam homogenizer is 1.5 and 6000 tons respectively, but the overall operating rate is only 57% in 16 years. Therefore, we expect that in the future, with the continuous development of the company's market, the start-up load will further increase, and the performance can be increased rapidly.
It is proposed to implement equity incentive to inject new driving force into the growth of the company.
The company recently released the first phase of the restricted stock incentive plan (draft), which intends to grant a total of 1.15 million restricted shares to the incentive target, of which 970000 shares will be granted for the first time and 180000 shares will be reserved.
The stock price granted for the first time is 10.62 yuan per share, and the board of directors decides to reserve the grant price of restricted shares. A total of 39 people were awarded incentives for the first time, accounting for 36.1% of the total number of employees (as of 2017.12.31). After the implementation of the equity incentive plan, it is expected to improve employee cohesion and creativity, and inject new impetus into the development of the company.
We estimate that the company's EPS for 2017-2019 will be 0.60 PE 0.76 plus 0.97 yuan respectively, corresponding to the 2017-2019 PE will be times that of 34-27-21, giving a "buy" rating for the first time.
Risk hint: single product category, risk of price fluctuation of raw material D4 and polyether