Fengshan Group raised 500 million yuan of convertible bonds in this period, which will be used for the construction projects of fine chemical products such as 3-dinitro-4-chlorotrifluorotoluene with an annual output of 10000 tons after deducting the issuance costs. the convertible bonds will be listed on July 21.
Pesticide product subdivision bibcock. The company covers the integrated production of pesticide intermediates, crude drugs and preparations, which are mainly herbicides (65% of the income in 21 years) & pesticides (24%), as well as some fungicides and other product preparations, intermediate products, and so on. The main products fluralin and quizalofop (both herbicides) occupy a certain market share in the world. Direct marketing of crude drugs is mainly based on the distribution of preparation products, with exports accounting for 30%. As of 22Q1, the production capacity of herbicide-insecticide raw drug products is 21500 tons. The main raw materials of pesticides in the company are chemical products, and the price is greatly affected by the price of crude oil. The revenue-profit of the company was affected by the Xiangshui chemical incident in 19 years. After 20 years of recovery, the price of crude oil rose sharply and profits declined significantly in 21 years. Profits fluctuated greatly in recent years, but the overall operating capacity of the company remained stable, the expense rate decreased year by year, and the overall operation improved.
Extend the intermediate upward to improve the profitability of the company. The enterprises with large scale of domestic pesticide export, scattered competition pattern, strong cost control and environmental protection ability are expected to become bigger and stronger in the competition. At present, the company has an annual production capacity of 1700 tons of quinofop under construction, and the rest of its energy is mainly focused on expanding the production capacity of upstream raw drug intermediates. At present, the company has a production capacity of 2000 tons of intermediates, while more than 20,000 tons of intermediates are under construction in Sichuan (18000 tons of intermediates will be built in the current convertible bond fund-raising project). After completion, it will supplement the upstream intermediates of herbicides such as fluralin, quine and nicosulfuron, give priority to the production of the company's crude drugs, and the rest will be used for sale, which is expected to further enhance the company's profitability.
The valuation is in the middle level since the listing, and the stock price elasticity and institutional attention are low. From the valuation point of view, the company's latest closing price corresponds to PE (TTM) of 22.1X, the valuation is at the level of the middle of nearly five years, comparable company Lear Chemical / limin shares PE (TTM) is respectively 10.4X/16.3X, slightly higher than comparable companies.
The company's current A-share market capitalization is 2.1 billion yuan, the stock price elasticity is low, almost no institutional positions.
Parity, debt protection in general. The interest rate clause of Fengshan convertible bond is higher than the average, and the additional clause is regular. Based on the closing price of the corresponding company on July 20, the parity of convertible bonds is 93.77 yuan, which is generally protected; under the assumption of this article, the value of pure bonds is 83.4 yuan, YTM is 3.15%, and debt bottom protection is general.
The listing price is expected to be between 115 and 120 yuan. Fengshan convertible bond rating AA-, the latest parity 93.77 yuan, can refer to the underlying Suli convertible bond (the latest closing price of 125.84, premium rate of 26.74%), Fengshan convertible bond listing on the first day of the conversion premium is expected to be between 220.27%, the listing price is between 115,0120 yuan.
Risk hint: crude oil prices continue to rise; downstream demand falls short of expectations
