Domestic professional reactive dye manufacturer. Jiangsu Jinji Industry is mainly engaged in the research and development, production and sales of dyes, and its main products are reactive dyes, which are used in textile dyeing and printing. The company's main profit sources are two subsidiaries. Jinyun Dye is mainly responsible for the research and development, production and sales of reactive dyes, while Jinhui Chemical is mainly responsible for the R & D, production and sales of dye intermediates and subsequent disperse dyes. From 2016 to 2018, the company's operating income was 1.001 billion yuan, 1.068 billion yuan and 1.202 billion yuan respectively, and the income scale continued to grow; the net profit of returning to the mother was 116 million yuan, 109 million yuan and 104 million yuan respectively, and the gross profit margin of sales was 26.23%, 23.16% and 20.88% respectively.
The upstream raw materials fluctuated greatly, and the downstream textile, printing and dyeing industries were transformed and upgraded. The main raw materials used in the production of reactive dyes are intermediates such as H acid and p-ester. Due to the influence of environmental factors, the price of upstream raw materials fluctuates greatly. The downstream of reactive dyes are mainly used in plant fiber (cotton, hemp), animal fiber (hair, silk) and regenerated cellulose fiber (viscose fiber, acetate fiber) and other fields. From 2010 to 2018, the production capacity of viscose staple fiber continued to expand, with an average annual growth rate of about 10.9%. Cotton production in another major application area maintained steady growth as a whole.
Reactive dyes occupy a dominant position and have stable profitability. Reactive dyes are the company's main source of profits. from 2016 to 2018, the company's main business income was 993 million yuan, 1.059 billion yuan and 1.2 billion yuan respectively, accounting for 99.21%, 99.17% and 99.80% of operating income, respectively. in the past two years, the growth of the company's main business income is mainly due to the continuous rise in product sales prices, but considering the rise in raw material prices, product sales prices and sales costs rise at the same time. The company's profitability is relatively stable.
New impetus is injected into the fundraising project. The company plans to raise a net capital of 184.8547 million yuan to invest in the construction project of high-grade commercial reactive dyes with an annual output of 30, 000 tons, with a total investment of 511.9409 million yuan, and expand the production capacity of low-alkali LA series, JSE series and inkjet printing PJ series, reactive brilliant blue, CN series and other high-grade reactive dyes. The company expects to add 1.0075911 billion yuan in sales revenue and 163.0762 million yuan in net profit every year after the project reaches production, bringing new growth potential for the company.
Profit forecast. We estimate that from 2019 to 2021, the company's return net profit will be 122 million yuan, 137 million yuan and 172 million yuan respectively, corresponding to 0.29,0.33 and 0.41 yuan EPS. We give the company 16-20 times PE in 19 years, corresponding to a reasonable value range of 4.64-5.80yuan, giving a neutral rating for the first time.
Risk hint. The risk of raw material price fluctuation; the progress of fund-raising projects is lower than expected; international trade friction.
