Main points of investment
ACR demand side accelerated release, the company's new production capacity occupies the incremental market. As the company is the first to enter the PVC floor (including WPC floor, SPC floor) industry, so the company's ACR products in the PVC floor industry has the highest market share, the current PVC floor industry is mainly exported to Europe and the United States. With the gradual promotion of PVC flooring in the domestic market in the future, it is expected to promote the demand of the company's ACR products (mainly processing aids and foaming regulators).
The company MBS is the domestic leader. The company's MBS production capacity ranks first in China, and its quality is close to that of international first-tier companies. Has a strong global competitiveness and domestic voice.
The market prospect of MC co-production ECH is promising, but the competition is also relatively fierce. The company's MC adopts the most advanced acid phase process, which has great advantages over the traditional CPE in environmental protection and performance, and uses 25% hydrochloric acid as a by-product to co-produce epichlorohydrin (ECH). Combined with the reversal of the relationship between supply and demand brought by Yaxing CPE production capacity shutdown and the improvement of ECH gross profit level in recent years, we are optimistic about the prospect of the company's production line. But at the same time, it is also faced with competition from Nikko ACM products and new ECH technology.
The cost of raw materials continues to decline, and the company's gross profit level is expected to rise steadily. The raw material cost of PVC auxiliaries accounts for about 85% of the total operating cost, and the prices of MMA and butadiene, the main raw materials of the company's products, have dropped significantly compared with before, and the price of polyethylene has basically remained stable. On the whole, the cost of raw materials shows a downward trend, and the level of gross profit margin is expected to rise steadily.
PBAT products ushered in the growth period of the biodegradable plastics industry, and the company's performance is expected to reach a new level. With the tightening of national environmental protection policy, the biodegradable plastics industry is the trend of the times. It is expected that the follow-up of state subsidies and the increase in production capacity will lead to lower costs in the future. we believe that biodegradable plastics will usher in a period of rapid growth in the industry, and the company's performance is expected to reach a new level when the production capacity of PBAT is increased by 60,000 tons per year.
Control Perima and enter new industries. In May 20, the company announced that it would increase the capital of Perima by 33 million yuan, acquire a controlling stake of 51.03%, and enter the new industry. Perima is mainly engaged in the R & D, production and sales of new materials including nano-inorganic silicon fireproof materials, nano-gel thermotropic materials, photochromic materials, inorganic fireproof glass and so on.
Profit forecast and investment rating: we expect the company's net profit from 2020 to 2022 to be 88 million yuan, 178 million yuan and 328 million yuan respectively, EPS 0.38,0.77 and 1.41 yuan respectively, and PE 33x, 16x and 9X respectively. Considering the reversal of the company's traditional business profitability, the PBAT under construction has broad market space and large future performance growth space, covering for the first time and giving "buy"
Rating.
Risk hints: the risk of large fluctuations in raw material prices; the risk that the permeability of degradable plastics is not as expected; and the risk that the construction progress of projects under construction is not as expected.