A leading fluorochemical company with a full industry chain layout. Since its establishment, the company has continued to expand the layout of the fluorine chemical industry, building a complete industrial chain from “fluorite resources - methane chloride - fluorocarbon chemicals - fluorine polymer materials”. As of 2023 H1, the company has independent fluorite resources (2 mining rights, 3 prospecting rights), an annual production capacity of 135,000 tons of anhydrous hydrofluoric acid, 160,000 tons of methane chloride, an annual production capacity of 190,000 tons of fluorocarbon chemical monomers, and an annual production capacity of 593,000 tons of fluoropolymer materials and monomers. The headquarters has an annual mixing and packaging capacity of 672,000 tons of monomer refrigerants and mixed refrigerants. The production capacity under construction includes 80,000 tons of hydrofluoric acid and more than 40,000 tons of fluoropolymer materials, forming Jinhua Five major production bases in Inner Mongolia, Quzhou, Shaowu, and Jiangxi.
The initial implementation of the third-generation quota plan is expected to begin a long-term business cycle. (1) With the initial implementation of the draft solicitation of comments on the domestic quota plan, it was determined that the baseline value of domestic HFCs production is 1,852 million tCO2 and the baseline value of HFCs usage is 904 million tCO2. Except for quota restrictions, the production and use of HCFCs with a baseline value of 65% will not be distributed in 2024. HFCs are managed by variety, and the quota increase for any type of HFCs should not exceed 10% on the supply side, which places strong restrictions on three generations of refrigerants on the supply side, etc. The app still takes time At the same time, on the demand side, as the global market for household and automobile air conditioners, industrial refrigerants, etc. grows, the supply and demand pattern of third-generation refrigerants will continue to be optimized, which is expected to begin a long-term business cycle; (2) the company has a differentiated layout of third-generation refrigerants, a complete product range, and a forward-looking layout of fourth-generation refrigerants. The Baotou base plans to build 20,000 tons of HFO-1234YF, 23,000 tons/year HFO-1234ze to co-produce HCFO-1233ZD, 10,000 tons of perfluorohexanone, 180,000 tons of chloromethane, 250,000 tons of calcification 40,000 tons of perchloroethylene. At present, the early stages of the project have been completed Approval.
Focus on fluoropolymer materials to help achieve long-term growth. Since 2009, the company has actively expanded the fluorine chemical industry chain through acquisitions, etc., focusing on high-value-added fluoropolymer materials. In recent years, with the production capacity of HFP and other products, the company's fluoropolymer materials sector has achieved steady growth in sales volume, contributing a major increase to the company's performance. As of H1 in 2023, the company has a production capacity of 593,000 tons of fluoropolymer materials, mainly including HFP production capacity of 30,000 tons, FEP production capacity 11,700 tons, PTFE production capacity of 10,600 tons, and VDF production capacity of 70,000 tons, with production capacity under construction exceeding 40,000 tons. According to the company's convertible bond feedback response report, with the full commissioning of the Shaowu base, it is expected to increase revenue by about 5 billion yuan and net profit by 601 million yuan.
Adjust profit forecasts and maintain “excess holdings” ratings. Considering that it will still take time for the company's refrigerants and fluoropolymer materials sectors to recover profits, we have adjusted our profit forecasts. The company's net profit for 2023-2025 is estimated to be 2.34, 4.97, and 676 million yuan (previously 5.27, 7.81, and 1,027 billion yuan), corresponding to PE of 38X, 18X, and 13X respectively, maintaining the “increase in holdings” rating.
Risk warning: the company's refrigerant quota falls short of expectations; project progress falls short of expectations