Meirui New Materials (300848) IPO Series 2: Green and environmentally friendly TPU materials are moving towards high-end development

華安證券 ·  01/27/2021

Core viewpoints

As a new type of environmental protection material, the industry of TPU in our country is in the growth stage and has a broad prospect. TPU is a kind of organic polymer synthetic material with a variety of superior characteristics, which can effectively replace traditional materials such as PVC, rubber, EVA, silica gel, etc., meets the requirements of circular economy and sustainable development, is focused on and supported by national policies, and is one of the main development directions of new materials in the future. China's TPU industry is in the growth period of the industrial life cycle, the development prospect is broad, and the market capacity is expected to be huge.

The production capacity has increased steadily, and the consumption pattern downstream has expanded steadily. From the supply side, China's TPU industry started relatively late and is still in the stage of growth, with new production capacity released one after another. Domestic TPU production has an average annual compound growth rate of 15.46% from 2014 to 2019, and output reached 512900 tons in 2019. The products of domestic companies are mainly concentrated in the low-end market, and there is a certain gap between the coverage of middle and high-end products and the products of foreign companies. From the demand side, TPU has a variety of outstanding performance, the application field from the footwear industry, PU synthetic leather and other low-end market industries continue to expand to medicine, aviation, environmental protection and other high-end market industries, and in various market segments gradually replace traditional materials to become the mainstream choice, the demand continues to grow at a high speed. From 2010 to 2019, China's TPU consumption has an average annual compound growth rate of 16%. The demand in 2018 will reach 582100 tons, and it is expected that China's TPU demand will reach 1 million tons in 2025.

Meirui New material focuses on the market of TPU differentiated products. Meirui New Materials focuses on differentiated production formulations and differentiated production processes, relies on differentiated high-end product layout, continues to develop the downstream market, and creates its own core competitiveness, profitability and return on investment improve steadily year by year. On the other hand, Wanhua Chemical mainly relies on a high degree of integration of the industrial chain to reduce production costs and produce TPU general-purpose materials, which has cost advantages in the same industry. Meirui New Materials and Wanhua Chemical make use of differentiation advantage and cost advantage respectively, and the company's profitability is in the first echelon in the industry.

Recommended to pay attention to differentiated TPU industry representative: Meirui new material

Risk tips: the risk of intensified market competition; the risk of leakage of formulation technology; the risk of the re-spread of COVID-19 epidemic affecting domestic and foreign markets; the risk of rising prices of raw materials; the risk of a relatively single product structure.

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