Report summary:
Relying on the main industries of polyether amines and optical materials, COC development outlines a new growth blueprint. The company's main products are polyether amines and optical-grade polymer materials, which are used in wind power blade epoxy resin curing agents, construction materials, and high-end automotive surface coatings. The company has been deeply involved in COC technology for many years and has successfully developed COC/COP production technology for high light transmission materials. A kiloton industrialization plant is about to be implemented, creating a new growth curve for the company, broadening the company's product moat, and improving competitiveness.
Relying on the optical materials business foundation, specializing in COC for ten years, it is expected to break overseas monopolies. COC is mainly used for optical and medical materials. The future market space is broad, and consumption is expected to increase from 21,000 tons to 29,000 tons during the 14th Five-Year Plan period. COC is a new type of engineering plastic with high performance and high added value. It has three high technical barriers: monomer preparation, catalyst screening, and process control. Currently, the COC market is monopolized by Japanese manufacturers, and domestic companies are in a good period of opportunity to lay out the COC industry. The company has been involved in this field since 2014, and has accumulated mass production for ten years, and is committed to breaking overseas monopolies. The company has built an annual production line of 5,000 tons of cyclic olefin monomers. The COC kiloton industrial production line is expected to be completed and tested in the near future. The first phase of the Qianjiang project has a production capacity of 10,000 tons, plans to produce 70,000 tons of cycloolefin monomers and 30,000 tons of cyclic olefin polymers per year, and a long-term production capacity of 30,000 tons.
The company's main business is polyetheramines: the industry boom is expanding at the bottom, consolidating the basic market. Polyether amines are relatively concentrated. Production capacity is concentrated in Huntsman and BASF, and domestic companies account for about 1/3. Affected by strong demand for wind power in the early stages, there are many domestic polyetheramine production expansion plans. Looking forward to the future, domestic companies are leading the expansion of global production capacity, and it is expected that they will gradually obtain pricing power. Demand for polyetheramine wind power exceeds 60%, and the global market grew from 184,000 tons to 286,000 tons during the 13th Five-Year Plan period, and is expected to reach 486,000 tons by 2025. The company's fund-raising layout produces 20,000 tons of polyether amine per year, explores polyether amine products with higher gross profit levels at the bottom of the industry boom, and improves profits through structural adjustments. Main business 2. Optical materials: Mainly used in automotive coatings, they have synergy effects with the COC business in technology, personnel and marketing.
For the first time covered, a “buy” rating is recommended. We expect the company's revenue in 2023-2025 to be 576/9.31/1,506 million yuan, and the net profit to mother for 2023-2025 is 0.34/1.44/274 million yuan, and the corresponding PE is 121X/29X/15X. Considering breaking overseas monopolies after the company's COC starts production, further consolidating its attributes as an advanced new materials enterprise, and higher than the average growth rate of comparable companies, it is recommended that the company be given 40 times PE next year, corresponding to a target market value of 5.8 billion yuan. First coverage, giving a “buy” rating.
Risk warning: capacity construction falls short of expectations, downstream demand falls short of expectations