1. Runyang Technology: the leader of IXPE, the "invisible champion" of foam industry.
The company is a leading domestic IXPE foam industry production enterprise, since its establishment to focus on enhancing the competitiveness of foam, 8 years after its establishment, listed on the market, the current IXPE production capacity is in the forefront of the country, has entered the supply chain of the world's top 500 enterprises, is the "invisible champion" in this field.
2, β-industry development: the main products are new, wide application, large market, fast development company currently mainly engaged in IXPE (electron irradiation crosslinked polyethylene) research and production and marketing. IXPE is a new type of polymer foam material in foam plastics, which is non-toxic and environmentally friendly, and has excellent comprehensive properties. It is expected to gradually replace traditional foam plastics in many application fields. 1) Building materials (corresponding products: popular series, antibacterial enhancement series). Consumer side: the market demand in Europe and the United States is stable, accounting for more than 50% of the global market share. PVC flooring has become the second largest floor decoration material in the United States. Supply side: China is the main producer and exporter of PVC plastic flooring in the world, benefiting from the rapid growth of demand for traditional floor decoration materials for PVC plastic flooring. China's market is still in the early stage of market development and has great potential. The silent pad produced by the company is a layer of high-end PVC plastic floor (WPC, SPC), which benefits from the rapid development of downstream PVC plastic floor market; 2) automobile interior decoration (corresponding products: special series). IXPE materials benefit from China's large automotive market, with the improvement of usage is expected to open considerable development; 3) Maternal and infant products (corresponding products: cooperation with "optimal ratio") IXPE materials are safe and non-toxic, to meet the growth needs of infants and young children, with the gradual replacement of traditional materials, the future market space is broad. In addition, following the IXPE series, the company has launched Goodrich cotton, which is mainly used for Runyang crawling pad.
3. Alpha-the advantage of the company: how strong is the company if you break down the financial report?
1) status: the company's main business is scarce in the A stock market and is a leading enterprise in the IXPE field. Since its inception, its performance scale and profitability have improved rapidly, and many indicators have outperformed the industry. 2) R & D:
The company pays attention to independent innovation and has achieved significant cost reduction and efficiency by applying R & D results to production; 3) customers: the downstream stable key customer structure is the basis of the company's sustained growth in performance. high customer concentration brings scale effect to reduce production costs. Because of its excellent product quality, the company has been the indirect supplier of The Home Depot Inc (US $110.2 billion in annual revenue), the leading US household building materials retailer in the world. 4) production: the company has continued to optimize the production process in recent years, further reducing the production cost by transferring the irradiation process from the contractor to itself; 5) production capacity:
Benefiting from the rapid growth of downstream PVC plastic floor demand, the company's production capacity has been gradually released. At present, the production-sales ratio of each product line has reached 100%.
Investment suggestion: IPO fundraising & Vietnam project breaks through the capacity bottleneck and is expected to achieve high performance growth in the next three years.
We estimate that from 2020 to 2022, the company will achieve a revenue of 434 million yuan and a net profit of 1.30 million yuan and a net profit of 318 million yuan per share, corresponding to EPS 1.30 pound and 2.04 pound per share. We are optimistic about Runyang Technology as the scarce target of A-share PVC new materials, and at the same time, as the leading enterprise of domestic IXPE manufacturing, it is in the dual rapid development stage of industry alternative demand growth and the company's competitive advantage continues to strengthen, giving 2021 30 times PE, the target price of 61.20 yuan, the first coverage to give "buy" rating.
Risk hints: technology risk, market demand fluctuation risk, raw material price fluctuation risk, COVID-19 epidemic risk, high customer concentration risk, project progress is not as expected.
