A leader in specialty surfactants, continuous product optimization drives performance growth. Since its establishment in 2003, the company has been focusing on the R&D, production and sales of specialty surfactants. After years of development, the company has now become a leading specialty surfactant enterprise with large production scale, complete variety and high technological content in China. The company has always adhered to the business strategy of “restructuring large varieties and creating profits with small functional varieties”, cultivating the continuous growth of high-margin small varieties and leading to continuous improvement in the company's profit level. With changes in external supply and demand and the stability of the internal supply chain, the company adjusted its business strategy in due course, and made every effort to focus on high-profit small-variety products, and the future can be expected when it is lightweight.
The specialty watch industry is growing steadily as a whole, and new application fields continue to expand. Surfactants are important products in fine chemicals. Among them, nonionic surfactants are the largest surfactant variety in China. In 2022, China's nonionic surfactants account for 50% of production. With the development of the washing and daily chemical industry, textile additives, pesticides, leather, etc., the total production capacity of nonionic surfactants in China is expected to reach 4.66 million tons/year in 2026. The company uses a sector model to vigorously develop various specialty surfactant products, mainly nonionic surfactants, and continues to expand its product matrix. At present, it has formed 17 major product segments, with an orderly layout of products in the three stages of cultivation, growth and maturation, laying a solid foundation for the company's medium- to long-term development.
The technology platform continues to be upgraded to support strong momentum for development. Special surfactants have three major barriers in R&D, production and equipment. After years of investment, accumulation and equipment upgrading, the company has formed significant R&D, production and equipment advantages. At the same time, on the basis that it is already proficient in special surfactant polymerization preparation technology, the company continues to upgrade its technical platform and master production methods for key small molecule raw materials. While reducing costs and expanding profit margins, it can also guarantee the stability of the supply chain. At the same time, by integrating raw material products, the company is expected to further expand into more demanding application fields, help the company continuously enrich its product lineage, continue to explore potential markets, and provide strong support for the company's sustainable development.
Expand potential products in line with demand, and open up medium- to long-term growth space for customer development. The company continues to optimize its product structure, meet downstream demand, and actively explore potential products such as polyether amines, wet electronic chemicals, and new energy rubber resins. Currently, the production and marketing situation of related small products is good. With the booming development of various downstream fields, it is expected to inject new impetus into the company's growth. At the same time, the company is actively promoting production capacity. The “Third Factory” Real Madrid Kaimeike project with an annual output of 330,000 tons of high-end functional new materials is being actively promoted. With the gradual release of high-end products, it is expected to continue to drive the company's performance growth. In addition, the company relies on the joint venture Zhongke Ya'an to lay out aerospace polyimide products. It currently has the technical conditions for large-scale industrial production. Polyimide has high added value as a dual-use military and civilian material. The layout of this material helps the company optimize its product structure and further enhance profitability.
Investment advice: We expect the company to achieve operating income of 18.71/25.24/2,935 billion yuan in 2023/2024/2025, a year-on-year change of -14.27%/34.88%/16.31%, and achieve net profit of 3.22/4.19/540 million yuan, year-on-year change -32.48%/30.02%/28.92%. The current stock price corresponding to 2023/2024/2025 PE is 17.23/13.25/10.28, respectively. The first coverage gives “strong” Recommended” ratings.
Risk warning: risk of market competition; risk of fluctuations in raw material prices; risk of production expansion falling short of expectations.