Hongbai new material is the leader of sulfur-containing silane coupling agent in the world, with the first market share in the world. At present, the company's main business includes sulfur silane and fumed silica. In 2019, the total sales of silane coupling agents were 52400 tons, of which silane coupling agents accounted for more than 90% of the main business income. In 2018, the company's sulfur-containing silane coupling agent had a global and domestic market share of 15% and 42% respectively, ranking first in the global market share for three consecutive years. In 2019, the company was listed as the fourth batch of manufacturing champions by the Ministry of Industry and Information Technology.
With the extension of the industrial chain, the company has built a complete green circular industrial chain of "silicon block-chlorosilane-intermediate-functional silane-fumed silica". The company builds a green production system based on chlorosilane lock-up cycle, with trichlorosilicon as the starting point, to the whole process of chlorine production of terminal silane coupling agent and gaseous silica. Through long-term research and development, the company has taken the lead in developing a new generation of special sulfur-containing silane products with independent intellectual property rights in China, whose process and product performance are better than domestic enterprise standards, and provide long-term stable supply to the top ten well-known tire enterprises in the world.
The permeability of green tires increases gradually, driving the demand for sulfur-containing silane. Sulfur-containing silane is widely used in green tires, which can reduce the rolling resistance and improve the wet skid resistance of tires, thus more energy saving and safety. The green rate of the overall tire market has exceeded 30% in 2018, and it is estimated that by 2023, green tires will account for more than 50% of the national tire market. Considering the gradual implementation of green tire regulations and the gradual maturity of the new energy vehicle market, the domestic demand for sulfur silane in this field is expected to maintain a growth rate of about 8.4% from 2018 to 2023 and reach 85000 tons in 2023.
The fundraising project enriches the functional silane product line and opens the space for success. The company improves the construction of chlorosilane green circulation industry by raising funds. After the completion of the construction, it will form 50000 tons of trichlorosilane production capacity and downstream chloropropyl trichlorosilane, chloropropyl trimethoxysilane, vinyl trimethoxysilane and other supporting silane production capacity, and increase the production capacity of gaseous silica 1500 tons. At the same time, the new silicone material project will add 5000 tons of aminosilane and functional aerogel by 10000 cubic meters per year. Finally, it extends from a single sulfur-containing silane product to other functional silane industry chain, opening up the growth space.
Coverage for the first time, giving a "overweight" rating. It is estimated that the revenue from 2020-2022 will be 10.38 PE, 1.2554 billion yuan, and the net profit of return to the mother will be 1.63 Universe 273 million yuan, corresponding to 25X, 19X and 15X, respectively, and this year's PEG will be 0.70. It is recommended to give 25 times of PE, corresponding to market capitalization of 5.12 billion, and to give "overweight" rating.
Risk hint: the progress of the new project is not as expected; the price of the product continues to fall.