[Huatai] Shilong Industry: recommended purchase on March 11

華泰證券 ·  03/10/2015  · Researches


The company is a comprehensive chemical enterprise mainly producing chlor-alkali downstream fine chemical products, mainly engaged in the production, sales, research and development of chemical products such as AC foaming agent, thionyl chloride and chlor-alkali, forming an industrial chain based on chlor-alkali and fine chemical products such as AC foaming agent and thionyl chloride. The company has been awarded the honorary titles of "Advanced Collective of Petrochina and Chemical Industry", "excellent Enterprise of Jiangxi Province", "Advanced Enterprise of technological Innovation in Leping City", "excellent and strong Enterprise of Industrial rise in Leping City" and so on.

The company is the second largest manufacturer of AC blowing agent and thionyl chloride in China. With its leading market share and superior technical indicators, the company has a leading position in the foaming agent industry. The company has mastered the production technology of improved AC foaming agent through its own research and development. In 2011 and 2014, the company was selected as the director of the AC blowing agent professional committee of China Chlor-Alkali Industry Association. The company's market share continues to increase, reaching 23.54% in 2013.

The company is a grade-level technical center recognized by Jiangxi Provincial Industry and Information Commission. After years of development, it has established a perfect technological innovation system based on the whole company's personnel. In recent years, it has continuously improved the production process and organized and implemented a number of technical transformation projects. At present, the company has mastered the production technology of improved AC foaming agent and sulfur dioxide full cycle method to produce high purity chlorosulfoxide, both of which are at the domestic advanced level and have independent intellectual property rights.

It is estimated that the diluted EPS of the company from 2015 to 2017 is 1.00,1.13,1.30 yuan respectively. According to the valuation of comparable listed companies, combined with the current situation of the company, we think that the reasonable valuation level of 15 years 18 PE 20 times, to recommend the purchase rating.

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