Main points of investment
The advantage of the main business is strengthened, and the group's assets are of high quality. The company completed the acquisition of Tianwei Chemical and Tianneng Chemical in 2015 and 2020 respectively, and the status of chlor-alkali industry has become increasingly clear. The existing PVC and caustic soda production capacity are 650000 tons and 470000 tons respectively, together with thermoelectric, cement and calcium carbide production capacity. In the first half of 2020, Tianwei Chemical and Tianneng Chemical achieved revenue of 1.49 billion yuan and 1.662 billion yuan respectively, which are the main sources of revenue for the company.
The controlling shareholder of the company is Xinjiang Tianye Group, which has a total PVC production capacity of 1.4 million tons of PVC, caustic soda capacity of 1.1 million tons, and another 600000 tons of coal-to-ethylene glycol project under construction. as its listing platform, the company is expected to benefit from high-quality asset injection in the future.
The epidemic pushed up the demand for paste resin and the price reached an all-time high. PVC paste resin is a kind of PVC plastic which is used in paste form. Gloves are the first downstream demand of paste resin, accounting for about 27%. Since 2020, driven by the epidemic, the demand for PVC gloves has increased significantly. In May 2020, the export volume of China's PVC gloves was 50400 tons, an increase of 58.8% over the same period last year, an increase of 33.2% from the previous month, and the proportion of glove demand increased by 13 pct during the epidemic. At the same time, due to the good profitability of glove enterprises and the accelerated pace of downstream production expansion, the demand for paste resin is expected to continue to increase. By the first ten days of September, the price of domestic PVC paste resin handset reached 22750 yuan / ton, and the market material was 16250 yuan / ton, up about 14450 yuan / ton and 9150 yuan / ton respectively compared with the low of the year. Tianwei chemical industry as one of the leading enterprises in the domestic PVC paste resin industry, with 100,000 tons / year of PVC paste resin production capacity, according to our calculations, assuming that other conditions remain the same, paste resin prices rise by 1000 yuan / ton, enhance the company's profit of 75.22 million yuan, greater flexibility.
Complete the acquisition of Tianneng Chemical Industry with good asset quality. In April 2020, the company completed the acquisition of Tianneng Chemical Industry with 4.839 billion yuan, and promised to deduct the non-profit from 2020 to 2022 not less than 524 million yuan, 542 million yuan and 525 million yuan. Tianneng Chemical Industry is a high-quality asset with outstanding profitability in the subordinate enterprises of Tianye Group, which has built an integrated circular industrial chain of "self-provided electricity-calcium carbide-ordinary PVC". At present, it has an annual production capacity of 450000 tons of ordinary PVC, 320000 tons of ionic membrane caustic soda and 2.05 million tons of calcium carbide slag cement. Through this reorganization, the company has added a new common resin business plate on the basis of special resin business, and increased caustic soda business production capacity to achieve a substantial increase in the scale of chlor-alkali chemical industry.
The supply and demand pattern of PVC has improved, and the economy has improved. PVC is mainly used for profiles, doors and windows manufacturing, is a real estate after the cycle of chemicals, the current real estate completed area is gradually warming up, is expected to drive PVC demand upward. In addition, in recent years, the popularity of PVC floor continues to increase, further pulling the demand for PVC. In terms of prices, after falling rapidly to 5000 yuan / ton during the epidemic, PVC prices have risen to around 6500 yuan / ton, basically the same as before the epidemic, and performance is expected to improve month-on-month.
For the first time, it covers giving a "buy" investment rating. It is estimated that the return net profit of the company from 2020 to 2022 is 663 shock 1.02 billion yuan, and the EPS is 0.49max 0.88 shock 0.95 yuan respectively. Due to the complete chlor-alkali integration industry chain and the flexibility of paste resin price rise, the corresponding PE is 12.6 shock 7.0max 6.5 times respectively.
For the first time, the company was given a "buy" rating.
Risk tips: PVC paste resin prices fell sharply, gloves and other downstream demand is lower than expected. Environmental protection and safety production risk, market demand and product price risk.
