Main points of investment:
The change of controlling shareholders and the implementation of double-main business development. Since its establishment, the company has been engaged in the research and development, production and sales of all kinds of fine chemicals, mainly engaged in AKD series and other paper chemicals, pharmaceutical intermediates and API, pesticide intermediates and so on. In 2016, the company formulated a dual-main business development strategy, involved in financial leasing and supply chain management. In addition, Jinling Holdings transferred Tianma Pharmaceutical Group as the controlling shareholder, holding 21.68% of the shares.
Environmental pressure superimposed competition in the industry intensified, the company's profitability declined. The company mainly produces a series of papermaking auxiliaries in the field of fine chemicals, including AKD, ASA, dry strength agent, wet strength agent, silica sol, rosin size, surface sizing agent, dispersant and so on. The company mainly sells to domestic and foreign large and medium-sized paper enterprises, such as APP (Asian Pulp Paper), Yongfengyu, Yueyang Paper, Sun Paper, Shandong Chenming and other high-quality customers.
Due to the macro-economic slowdown, great pressure on environmental protection, insufficient demand power downstream, further intensified competition in the industry, the company's profitability has declined. In 2016, the sales of AKD paper chemicals was 41600 tons, down 0.88 percent from the same period last year, and the gross profit margin was 10.41 percent, down 1.9 percent from 15 years.
The gross profit margin of pharmaceutical intermediates and APIs has increased steadily. The domestic market of pharmaceutical products is directly supplied to the major pharmaceutical enterprises, and the export is mainly agent consignment mode. The sales of health products are divided into self-sale mode and agent mode, mainly agent mode. The company's pharmaceutical intermediate products are mainly amino acid protective agents and protective amino acid products, and most of them are used for export, and the main customers are international well-known pharmaceutical and chemical enterprises, such as South Korea SK Group, Switzerland Bahern, Germany Bayer and so on. In 2016, sales of pharmaceutical intermediates and APIs were 868 tons, down 15.16% from the same period last year, and gross profit margin was 28.58%, an increase of 3 percentage points over 15 years.
Vigorously expand financial leasing and supply chain new business, looking for new profit growth points. Since April 2016, the company has formulated a dual-main business development strategy to vigorously expand financial leasing and supply chain management business. The main leasing business is in the fields of urban infrastructure (water supply, sewage treatment, solid waste treatment, urban heating, etc.), energy (cogeneration, small and medium-sized hydropower, distributed photovoltaic power generation, etc.). Service field (medical equipment, hospital, cultural industry, etc.), comprehensive field of equipment manufacturing (middle-end equipment manufacturing, modern logistics industry with upstream and downstream customer resources, etc.). The main products of supply chain business include trade, business factoring, order financing, bill settlement, business integration consultation and so on.
Profit forecast and valuation. The company mainly covers three major areas: fine chemicals, pharmaceutical health, financial leasing and supply chain management, and is committed to the profit improvement of traditional business and the cultivation of new business in the future. We estimate that the company's net profit for 17-19 years will be-711,0.02,30.33 million yuan respectively, and the diluted EPS will be-0.01,0.02,0.05. considering the current low profitability of the company, the company will not be rated for the first time.
Risk hint: environmental protection standards have become stricter; the main business has declined further.