Xinxiang chemical fiber: a leading domestic chemical fiber enterprise. The company is a large first-class enterprise producing chemical fiber textile raw materials in China, and its production scale and economic benefits are among the best in China's viscose fiber industry. the company's main products are semi-continuous spinning viscose rayon, continuous spinning viscose rayon, viscose staple fiber, polyester civil filament, spandex a total of more than 300 varieties. In recent years, more than ten new varieties have been developed, such as colored viscose fiber, bamboo pulp viscose fiber, soybean viscose fiber and so on. Against the background of rising spandex fiber prices and increased sales, the company's operating income and net profit in the first quarter of 2021 improved significantly, realizing operating income of 1.948 billion yuan, an increase of 109.74% over the same period last year, and net profit of 311 million yuan, an increase of 570% over the same period last year.
The production capacity of viscose filament is the largest in the country, and the brand advantage is remarkable. The company is the largest viscose filament manufacturer in China, with an annual viscose filament production capacity of 80,000 tons. At present, the domestic viscose filament market is highly concentrated, and the total production capacity of 210,000 tons / year viscose filament in the company, Jilin chemical fiber and Yibin Seria basically represents all the production capacity of domestic viscose filament. The company's "Egret" brand trademark is rated as "China well-known Trademark", which has a great influence in domestic and foreign markets. In 2020, the company's viscose filament exports accounted for about 40% of the country's total exports, and the company's spandex fiber exports accounted for about 10% of the country's total exports.
Spandex boom, the company's profits are expected to continue to benefit. According to Zhuochuang data, in the first quarter of 2021, the average price and average price difference of spandex 40D were 51,000 yuan / ton and 2.28 million yuan / ton respectively, up 41.3% and 31.0% respectively from the previous month. 73.3% and 57.7% higher than the same period last year. On June 18, the latest price and price difference of spandex 40D were 69,000 yuan / ton and 34900 yuan / ton, respectively. As spandex prices remain high, we believe that the company's profits are expected to continue to benefit.
The first phase of high-quality ultra-fine denier spandex fiber is under construction, and it is planned to raise construction funds through a non-public offering. In order to improve the company's competitive advantage in differential spandex market segmentation, the company has an annual output of 100000 tons of high-quality ultra-fine denier spandex fiber project under construction. According to the company's non-public stock offering plan (the second revised version), the total investment of the project is 1.048 billion yuan, the company intends to raise no more than 991 million yuan through non-public offering shares, and invest 900 million yuan net capital into the project, the rest of the funds will be used to supplement liquidity. After the project is fully produced, the company is expected to achieve an average annual sales income of 990 million yuan, an average annual profit of 139 million yuan, and an after-tax internal rate of return of 12.64%. The company expects the project to be completed and put into production by the end of this year.
Profit forecast and investment advice. We estimate that the return net profit of the company in 2021-23 is 1.498 billion yuan, 1.804 billion yuan and 2.023 billion yuan respectively, and the corresponding EPS is 1.19,1.43,1.61 yuan per share. With reference to the valuation of comparable companies in the same industry, the company is given a reasonable value range of 7-9 times PE, in 2021 with a reasonable value range of 8.33-10.71 yuan, with a "better than big city" rating for the first time.
Risk tips. Raw material price fluctuation risk, market competition risk, safety and environmental protection risk.