① Lily claims that the bankruptcy of Huibahe has had a certain impact on high-performance products; ② Lily has cooperated with Huibahe for a long time, and the joint venture has received attention; ③ the bankruptcy of giants compounded by a recovery in demand, and the pigment industry is expected to “reverse the plight”.
Financial Services Association, May 14 (Reporter Luo Yichen) Recently, news of the bankruptcy of international paint giant Huibahe continued to ferment, triggering the collective strengthening of A-share pigment concept stocks. Industry leader Lily (603823.SH) won the “7 days 5 boards” and was in the limelight for a moment. Today, at the Lily Flower performance briefing, investors raised a series of questions about the impact of Huibaher's bankruptcy, focusing on the future ownership of the joint venture.
Joint venture shareholding structure, source: Tianyancha
Regarding the “Huibahe bankruptcy favors domestic organic pigment manufacturers” in the market, Lily Flower management cautiously responded, saying, “The incident had a certain impact on the pattern of the domestic pigment industry, especially the high-performance organic pigment industry.”
According to data, due to their high technical threshold and strong environmental friendliness, high-performance organic pigments are occupied by several leading global chemical companies in the international market. At present, global organic pigment manufacturers have formed three echelons. Among them, Huibahe and DIC are in the first tier; domestic manufacturers such as Lily, Colorful Chemical (300758.SZ), Shuangle Co., Ltd. (301036.SZ), and United Chemical (301209.SZ) belong to the second tier; the third tier is mainly composed of many domestic small and medium-sized manufacturers.
In addition to indirect effects at the industry level, the bankruptcy incident may also directly affect the cooperation between Lily Flower and Huibaher, and the future ownership of the joint venture between the two parties has attracted attention. In response, the company's management emphasized that up to now, the joint venture's production and operation are all normal. “We will closely monitor the development of the Huibahe incident and adjust the company's strategy accordingly.” As for “will the remaining shares in the joint venture be acquired and turned into a wholly-owned subsidiary?” The management did not directly respond to the question; it only indicated that the relevant matters would be disclosed in a timely manner.
According to reports, the cooperation between Lily Flower and Huber began in 2022. At that time, Huiberghe acquired Clariant and became the second-largest shareholder of the company's holding subsidiary Hangzhou Baihe Huibahe Pigments Co., Ltd. (hereinafter referred to as “Lily Faber”, its predecessor “Lily Clariant”), holding 49% of the shares. According to the 2023 annual report, Lily Huber's annual net profit was close to 50 million yuan, ranking first among Lily Flower's major holding companies. In the same period, the listed company's annual net profit was 120 million yuan.
Over the past year, the global pigment industry has reached a low point. Due to the overall weakness in domestic and foreign market demand, Lily Flower management said that in order to ensure market share, product prices were adjusted accordingly, leading to a decline in various financial indicators. Entering this year, the bankruptcy of Huibahe compounded the recovery in demand in the industry, triggering market expectations for a reversal in the plight of the pigment industry. In the first quarter of this year, the net profit of lily flowers to their mother increased by more than 160% year on year, achieving a good start. At the same time, the prices of the company's main products also rebounded.