Low debt and high dividend, showing the advantage of giving back to shareholders
The company reported an asset-liability ratio of 11% in 2018, and the proportion of share pledge is close to 0, which is safe and secure. In recent years, the company has continued to pay high dividends, with cash dividends accounting for more than 70% of net profits, and 94% in 2017, giving back to shareholders.
The industry pattern of environmental protection is becoming stricter, and the advantage of the whole industry chain is at the top.
The company's main product production capacity includes 13000 tons of m-amino group, 4600 tons of m-hydroxyl group, 9000 tons of 2pyrinic acid, 2000 tons of m-aminophenol and 1000 tons of ODB-2. Among them, the revenue proportion of m-amino-m-aminophenol-ODB-2 industry chain is the highest and the price elasticity is the highest, and this complete thermosensitive material industry chain is unique in the whole industry. after ten years of bear market, ODB-2 has only about 4 enterprises in production, and the actual effective production capacity of m-aminophenol is also far lower than the nominal production capacity.
ODB-2: downstream thermal paper demand growth rate continues to maintain more than 4.5%, while the supply side after 10 years of bear market, there are only four enterprises in the world, the industry pattern has undergone a fundamental change: H2 ODB-2 bottomed out in 2017 rebounded to 500,000-600,000 yuan / ton, the price increase process thickened the entire thermal paper industry profits, the price transmission is very smooth And there is basically no new production capacity in the future to superimpose high barriers in the industry and the advantages of corporate costs and environmental protection, and the future boom is expected to last for a long time.
M-aminophenol: its downstream medicine, dyes and pesticides are relatively stable and rising, while the domestic supply is in many places around Beijing, Tianjin and Hebei, with a total of about 30% limited start-up, the effective production capacity is far lower than the actual production capacity, and the price has risen to 200,000-240,000 yuan / ton, standing on a new level.
M-hydroxyl: the competitor's production capacity is relatively small and located in 226 cities, with an affected capacity of about 2500 tons, accounting for 21% of the global production capacity. The number of m-hydroxyl groups has risen from about 60,000 yuan / ton before to 140,000 yuan / ton to 180,000 yuan / ton now, an increase of about 167%.
2Jing 5 acid: it basically accounts for less than 1% of the downstream cost. Recently, the start-up of the two plants in Cangzhou was not smooth, affecting the production capacity of about 1000 tons and causing the price to rise from about 20,000 yuan / ton to 60-70,000 yuan / ton.
M-amino: except for the company, other domestic manufacturers are all small factories of less than 2000 tons, which have neither scale advantage nor cost advantage. Under the strict environmental protection, they are forced to withdraw from the market, and the industry pattern is reshaped. The current price of amino groups is about 40,000 yuan / ton, an increase of 167% compared with the previous 15,000 yuan / ton. The limited supply of mother nuclear products affects the supply of raw materials in the whole industry chain.
Sharpen a sword for ten years to build a solid environmental protection barrier
Benzene intermediate production industry is a typical industry with high energy consumption and high pollution, with large amount of waste water and extremely difficult to deal with. The company has sustained high investment in environmental protection, and has invested a lot of money in environmental protection work every year in recent years, and has carried out process transformation of environmental protection facilities for a total of three times, and the investment in environmental protection this year is as high as 50 million yuan. Recently, the demonstration device for the treatment of spray drying tail gas of the company's regenerative thermal incinerator has been put into trial operation, which has effectively solved the problem of discharge efficiency in some workshops; the three-dimensional electrode oxidation technology for the treatment of high salt wastewater has also entered the equipment installation stage. The company was approved for normal production as early as the 2008 Beijing Olympic Games, and withstood the test of environmental protection storm in the past two years. More than ten years of environmental protection accumulation has built a solid environmental protection barrier for the company. The subsequent enhancement of wastewater treatment capacity will enable the company to put more production capacity into production and further increase profits.
It is estimated that the company's net profit in 2018 and 2019 will be 8 yuan and 1 billion yuan respectively, corresponding to EPS 1.46 yuan and 1.84 yuan, PE 8.0x and 6.8x, maintaining the buy rating.
Risk hint
The risk of competitors resuming production, the risk of new capacity entering the industry, the risk of exchange rate change, the risk of paperless implementation exceeding expectations.