Event
On February 2, 2021, the company announced that it intends to invest no more than 230 million yuan and 60 million yuan to build an annual production capacity of 60,000 tons of biodegradable polymer material PBAT (second phase) project and an annual production capacity of 30,000 tons of ACR impact processing modifier project.
Main points of investment
PBAT Phase II and ACR expansion projects provide continuous momentum for the company's development. The company's PBAT (Phase II) project sharing (Phase I) project raw material tank area, storage facilities and some auxiliary facilities, the construction area is shortened, and is expected to be completed and put into production before March 31, 2022, when the company will form a PBAT capacity of 120000 tons / year. The ACR impact processing modifier project with an annual production capacity of 30,000 tons does not need new land and is expected to be completed and put into production by December 31, 2021, when the company will have an annual production capacity of 100000 tons of ACR. The rapid completion and commissioning of the PBAT project is expected to help the company fully enjoy the blue ocean market dividend, and the ACR project will continue to consolidate the company's market position in PVC processing impact modifiers.
The "plastic ban" has been implemented in many places, and there is a broad space for degradable plastics, so it is optimistic about the prospect of PBAT. Since 2021-1-1, Beijing, Shanghai and other places have formally implemented the "plastic ban". According to the estimates we previously reported, the annual domestic demand for degradable plastics will increase to 2.5 million tons / year by 2025, and the current domestic supply is less than 200,000 tons / year. there is a broad demand for degradable plastics. Among them, PBAT technology is mature and has the conditions for large-scale production, so it is expected to become the most beneficial variety of degradable plastics.
Projects under construction have been put into production one after another, and the company has entered the performance harvest period. The company is building 60,000 tons of PBAT (expected to be completed in 2021Q3), 20,000 tons of MBS (expected to be completed by the end of 2021), 20,000 tons of MC (trial production) and 20,000 tons of ECH (40,000 tons of MC supporting project, which is expected to be put into production in mid-2021) will gradually fulfill its performance, and the company will enter a period of accelerated development.
Profit forecast and investment rating: we estimate that the company's return net profit in 2020-2022 is 88 million yuan, 259 million yuan and 417 million yuan respectively, and the EPS is 0.38,1.12,1.80 yuan respectively. The current stock price corresponds to 48x, 16x and 10x respectively. Taking into account the continuous production of projects under construction and the high performance flexibility of PBAT to the company, the "buy" rating of the company is maintained.
Risk hints: there are uncertainties in the promotion strength and sustainability of the "plastic ban"; the risk of overcapacity caused by the centralized launch of PBAT; and the risk that the construction schedule of projects under construction is not as expected.