As one of the leading color yarn production enterprises in China, the company has been ploughing the color yarn industry for many years, especially in the sock color yarn market. The printing and dyeing industry is the middle link of the textile industry chain, connecting the upstream textile fiber and the downstream textile and clothing industry. The dyed yarn is mainly used for knitted clothing such as socks, sweaters, gloves and knitted and woven fabrics.
Convertible bond information: the amount of convertible bond issued by the company is 570 million, and the debt rating AA-, online issue / old shareholder placement is June 23. The coupon rate is 0.30%, 0.50%, 1.00%, 1.50%, 1.80%, 2.50%, and the redemption price at maturity is 108.3 yuan (including the last interest). In terms of terms, redemption [conversion period, 15swap 30130%], amendment [period of existence, 15pedigree 30memery 85%], resale [last consecutive years, 30ppb 30penny 70%], the terms are market-oriented and well-regulated. According to the 7.18-day data, the pure debt value of Fuchun convertible bond YTM2.18%, is 78.45 yuan, the par value corresponds to the pure debt premium rate of 27.48%, and the debt bottom protection is general; the conversion parity is 84.86 yuan, and the par value corresponds to the equity conversion premium rate of 17.84%.
With reference to the stock-valuation of convertible bonds in the textile service industry, if the parity of Fuchun convertible bonds is maintained at 84.86 yuan, the reasonable conversion premium after listing is expected to be 32%, 42%, and the corresponding reasonable price range is 112.02-120.51 yuan. In terms of stock valuation, according to the unanimous expectations of Wind, the company's net profit from 2022 to 2024 is expected to be 2.5 million yuan, respectively, and the corresponding PE is 10X/7X/6X.
In financial terms, the company's color yarn sales production and sales are booming, with a "simultaneous rise in volume and price" in 2021.
The company is mainly engaged in the production and sales of colored yarn, and the proportion of income has been basically maintained at about 90% in recent years. In recent years, the company's production capacity is basically running at full capacity, and capacity expansion is imminent.
In terms of revenue, the company's revenue increased from 1.434 billion yuan to 2.175 billion yuan in 2018-2021, and CAGR was 15%. In 2021, the company benefited from the increase in product prices driven by the new production capacity of ① and the rising cotton price of ②, and the company's revenue increased significantly by 44% 22Q1 from the same period last year. 22Q1 income maintained a high growth trend; in terms of homing net profit, the homing net profit increased from 98 million to 230 million yuan in 2018-2021, and CAGR was 33%. 2022Q1 was affected by the high base profit brought by more low-cost inventory in the previous period, and its net profit was-32.7% compared with the same period last year. Cash flow and capital expenditure: the company's operating cash flow remains stable as a whole, capital expenditure continues to expand under the influence of additional capacity construction, and we look forward to the incremental contribution of profits from the subsequent commissioning of new capacity.
The total amount of funds raised by the company's convertible bonds will not exceed 570 million yuan. After deducting the issuance expenses, the net funds raised will be invested in the compact spinning project with an annual output of 240000 spindles, which will help the company extend to the upper reaches of the industrial chain (spinning) and improve the layout of the company's industrial chain. through the advantage of scale to reduce the cost of raw materials and ensure supply. In addition to the convertible bond investment project, the company also has a Jingzhou annual output of 60,000 tons of high-quality bobbin production line project, Wuhu annual output of 30,000 tons of fiber dyeing project is under construction, the future production capacity is expected to continue to increase.
Risk hints: macroeconomic fluctuation risk; policy risk; intensified industry competition; substantial fluctuations in raw material costs; risk of large fluctuations in stock prices; lower-than-expected downstream demand