Silbon backdoor Danhua Technology to log on to the capital market
Silbon backdoor Danhua Technology entered the capital market, the original Danhua Technology coal to ethylene glycol and other main business will continue, after the reorganization, Danhua Technology will be placed into more profitable chemical assets, the company's main business will be newly increased value-added olefin derivatives research and development, production and sales, the main product range will further cover a series of multi-petrochemical and fine chemicals such as acrylonitrile, MMA, EVA, EO and its derivatives. Profitability has been greatly improved, so that Danhua Technology has been transformed into an enterprise with strong market competitiveness. The restructuring plan is for Danhua Technology to issue shares to all shareholders of Silbon to buy 100% of Silbon's shares. Silbon is valued at 11 billion yuan, with a total issue price of 3.66 yuan per share, with a total of 3.005 billion shares issued. Silbon promised that the total net profit of deducting non-return in 2019-2021 would not be less than 2.85 billion yuan. Based on the average promised performance of 950 million / year in 2019-2021, Silbon's acquisition consideration PE and PB were 11.6 times and 1.57 times respectively.
Sierbang industrial chain integration positioning high-end
Silbon mainly uses methanol as the core raw material, relies on the MTO main plant and based on methanol to produce olefin products such as ethylene and propylene, and then uses olefins as intermediate products to produce high value-added products such as acrylonitrile, MMA, EVA and EO and their downstream derivatives. We believe that the single unit of MTO in Silbon is the largest in China, and it has a competitive advantage in terms of technology and scale. The downstream of MTO avoids the traditional polyethylene, polypropylene and other products, and its main products such as acrylonitrile, MMA and EVA achieve the first echelon in China, achieving product differentiation and strong competitiveness, and the industrial chain design has its own characteristics.
Major products such as acrylonitrile and EVA are aimed at the downstream high-end market, and better profits are expected to be achieved through the differentiation of high-quality products.
Expand the upstream and downstream to further improve the industrial chain
Silbon business is carried out with methanol as the core raw material, while Danhua Technology has resources and location advantages in the development of new coal chemical projects such as coal-to-methanol, and the two sides are expected to achieve industrial coordination. Silbon is expected to improve the weak links of methanol supply in the upper reaches of the industrial chain, realize the layout of the whole chemical industry chain, obtain the added value of the integrated industrial chain to a greater extent, and enhance its voice in the olefin derivatives industry. In addition, we believe that Silbon is expected to continue to expand downstream to new materials with higher added value along the existing olefin industry chain, further enhance the overall profitability of the industrial chain while digesting its own upstream production capacity, and achieve bigger and stronger.
Profit forecast and investment advice: if the impact of the acquisition of Silbon is not taken into account, we expect the company's 2019-2021 net profit to be-0.6 billion RMB. If this acquisition is successfully completed, after the merger, we estimate that the company's 2019-2021 net return profit will be 8.4amp 94Compact 1.06 billion yuan, with the current price corresponding to PE times 21-19-17, covering for the first time, giving the company an "overweight" rating risk hint: the risk of failure in the injection of Silbon assets, the risk that Silbon's promised performance falls short of expectations, the risk of overpricing, and the risk of impairment of goodwill after restructuring. The risk of a sharp decline in the prices of products such as acrylonitrile and EVA.
