Starting with polyester fiber, the company focused on green and differentiated development has been deeply involved in the polyester staple fiber industry for 20 years, and has now formed green fiber products including recycled polyester staple fibers and low melting point fibers in multiple application scenarios. The company focuses on differentiation and functionality, has a rich product range, excellent quality, and a wide range of downstream applications. In recent years, along with low melting point fiber release, the company's performance has grown rapidly. As of 2024Q1, the company has a total production capacity of 165,000 tons of recycled polyester fiber, 220,000 tons/year of low-melting polyester staple fiber, 21,300 tons/year of low-melting polyester filament, etc.
Low melting point polyester staple fiber: A wide range of downstream applications require superposition of products, igniting new growth engines. Polyester staple fibers are polyester intermediate products, which have advantages such as heat resistance, wear resistance, and high melting point. Among them, low melting point fibers, as a type of differentiated polyester staple fiber, play a role in replacing traditional chemical adhesives by reducing the melting point of the components in the skin core structure, and have remarkable green and environmentally friendly properties. They are widely used in the manufacture of non-woven products such as automotive interiors, homes, and sound-absorbing cotton.
Demand side: Low melting point fiber's low melting point and high temperature resistance enable it to be processed through hot melt or thermoforming technology in the automobile manufacturing process to produce products that meet the various modeling requirements of automobile interiors. Currently, there are more than 40 types of parts based on non-woven materials used in automobiles, from air and oil filter media to interior materials, etc. Non-woven interior materials include sound and thermal insulation materials, structural parts and decorative parts. Molded non-woven interior parts include door interiors, luggage compartment covers, car roofs, car seats, seat backs, etc., and can also be used for sound insulation materials in automobile manufacturing and shock absorbing materials It improves vehicle safety, comfort, and reduces noise pollution, and low melting point polyester staple fibers have better flame retardancy and wear resistance compared to polyolefin and polyamide. Along with the recovery and recovery of the downstream application market, the unique advantages of low melting point fibers will continue to increase application penetration rate, and the growth space and growth rate are considerable. Supply-side supply competition is intensifying, and the direction of demand-oriented segmentation and differentiation is a future development trend.
Recycled colored polyester staple fibers: Green, outstanding fashion properties, and significant low cost advantages. Recycled colored polyester staple fibers use waste polyester raw materials and are obtained through a recycling process. Compared with native products, recycled products have the advantages of low carbon emissions, good dyeability, low cost, and little fluctuation due to oil prices. Colored is a differentiated segmentation direction for recycled polyester. Subsequent dyeing costs, water consumption, carbon emissions, etc. can be reduced through regenerative dyeing. Demand for color customization has increased, and brand and consumer recognition of the environmental properties of products has increased in the context of superposition double carbon, and the product's sustainability is remarkable.
The company focuses on R&D, low cost and differentiation to create leading companies in the industry segment that respond positively to policy requirements, focus on product development and technological innovation, and have been recognized by the industry and customers. The company's production capacity of low-melting polyester staple fibers and recycled colored polyester staple fibers ranks second in the industry, is at the forefront of the industry, and has scale advantages. In the context of high oil prices, recycled colored polyester fiber has significant cost and price advantages over native products. At the same time, the company continues to enrich the differentiated product matrix to meet the customized needs of customers. The company's main products have synergy effects between production processes and customer resources. The management always grasps industry trends and flexibly produces; and along with the company's accumulation of experience in recycling processes and technological progress, work to reduce costs and increase efficiency is progressing in an orderly manner.
Investment advice
Without considering future changes in share capital, the company's net profit from 2024 to 2026 is estimated to be 150 million yuan, 200 million yuan, and 280 million yuan, corresponding to the closing price PE on June 22, 2024 being 12.3X, 9.4X, and 6.6X. This is covered for the first time, giving it a “buy” rating.
Risk warning
1. Terminal demand falls short of expectations; 2. Project commissioning progress falls short of expectations; 3. Prices of raw materials have risen sharply; 4. Risk that profit forecasting assumptions are untrue or fall short of expectations.