This report is read as follows:
The company is the leading yarn dyeing enterprise in China, and the production capacity of colored yarn is the leading in the country. In the context of stricter environmental protection, the company is expected to increase its market share by virtue of its significant cost advantages, excellent environmental protection capabilities and active capacity expansion.
Main points of investment:
Investment suggestion: the target price is 22.96 yuan, covering the "overweight" rating for the first time. The company is the leading yarn dyeing company in China. From 2022 to 2024, the EPS is predicted to be 1.81 EPS 2.32 max 2.97 yuan, with a comprehensive PE and PB valuation of 22.96 yuan, giving a "overweight" rating for the first time.
China's leading yarn dyeing companies are expected to continue to increase their market share. The market size of the printing and dyeing industry is about 300 billion yuan, of which the yarn dyeing scale is tens of billions of yuan. The printing and dyeing industry is full of competition, the industry concentration is low, the environmental protection policy is stricter, the downstream brands pay more attention to the concept of sustainable development, the penetration of color yarn is expected to increase, the backward production capacity is expected to accelerate clearance, and the industry concentration is expected to be improved. the company is expected to fully benefit by virtue of its unique competitive advantages.
The company has remarkable cost advantage and excellent environmental protection ability. The company creates the warehouse production mode, standardizes the production process, reduces the cost and increases the efficiency. At the same time, the company has outstanding cost control ability, reduce unit energy consumption through technical transformation, and effectively improve the utilization rate of resources. In addition, the company pays attention to the investment in environmental protection, implements the concept of environmental protection in production, uses technology to realize the recycling of resources and protects the environment.
The company actively expands production capacity, extends the upstream industrial chain, and increases profit growth revenue. The company is actively expanding production and is expected to have a yarn production capacity of 90,000 tons in the future. with the gradual expansion and climbing of production capacity, the company's color yarn business is expected to further expand, laying a solid foundation for the company's performance growth.
The company actively develops fiber dyeing projects to form coordination with trade yarn business. At the same time, the company actively extends the industrial chain, distributes the upstream industry, and builds about 500,000 spindle intelligent precision spinning projects to ensure the supply of raw materials while reducing costs and increasing efficiency.
Risk tips: raw material price fluctuations, production expansion is not as expected and the risk of repeated epidemic situation.