Main points of investment:
The first unit of the surface engineering chemicals industry, the performance is growing steadily. The company is a national high-tech enterprise with independent innovation intellectual property rights, and is also one of the earliest suppliers of surface engineering chemicals in China, providing three series and more than 300 kinds of coating additives for downstream industry production and processing enterprises. The main business covers electroplating additives, electroplating intermediates, electroplating special chemicals, PCB chemical auxiliaries, electronic chemicals, paint additives, polycarbonate polyols and other chemicals and supporting environmental protection equipment. Among them, the company's new environmental protection coating intermediate polycarbonate polyol (PPC) has passed the appraisal of Guangzhou Science, Technology and Information Bureau, and the product technology level is in the leading position in China. Operating income in 2015 decreased by 12.326 million yuan from the previous year, a growth rate of-9.2%, but in the first three quarters of 2016, the company's operating income growth rebounded from the same period last year, and the performance returned to the upward path.
The fund-raising project has launched two major R & D bases, and its market share will be further expanded. The company will issue 17.5 million shares, and the funds raised will be invested in the first phase of the Daya Bay production base construction project and the R & D center construction project. Among them, the first phase of the Daya Bay production base construction project will add 11000 tons of surface engineering chemicals, including 6000 tons of coating additives and 5000 tons of new coating intermediate polycarbonate polyol (PPC). PPC uses carbon dioxide, a cheap industrial waste gas, as its main raw material, and its production cost is 20% to 30% lower than that of the product being replaced. Dazhi Technology has 2000 tons of PPC and PEC production lines, which has a broad market prospect. After the fund-raising project reaches production, it will form the largest domestic enterprise with an annual output of 7000 tons of PPC. The project will optimize the income structure among the company's main products and give better play to the synergistic effect between coating additives and coating intermediates. We believe that this capacity expansion will greatly reduce the comprehensive production costs of products, form economies of scale, and take the lead in seizing the domestic PPC blue sea market for coating.
The new environmental protection surface engineering chemical industry has become a new growth point, and the policy promotes the development of the company. More stringent environmental regulations abroad (such as RoHS Directive and EuP Directive) have set a higher threshold for the environmental protection requirements of electronics, household appliances, toys, furniture and other end products downstream of China's surface engineering chemical industry. Domestic policies such as the 12th five-year Development Guide of the Petroleum and Chemical Industry and the outline of the National medium-and long-term Scientific and technological Development Plan (2006-2020) all emphasize the transformation and upgrading of traditional industries to achieve the transformation of the industry to green and environmental protection. The company also actively participates in the formulation of national standards and industry standards, which not only reflects the company's leading core technological advantages, but also enables the company to accurately grasp the policy orientation and development trend of the industry, and lays the foundation for the company to establish a leading advantage in the market competition. L the acquisition of Tianze Technology has reached a long-term strategic cooperation, forming a situation of complementary advantages. Dazhi Science and Technology plans to acquire a 10% stake in Tianze Science and Technology Industrial Co., Ltd for a total price of 18 million yuan. Tianze Science and Technology is a national high-tech enterprise specializing in the development, production and sales of metal and non-metal surface treatment products. With its excellent reputation, it has established technical cooperation with a number of international well-known enterprises and several domestic scientific research institutes. After the acquisition, the two sides will promote cooperation in new product development and technology application, give full play to their respective product and customer market advantages, carry out joint marketing, and jointly open up new markets. We believe that with the formation of the complementary advantages of the two sides, Dazhi Technology will further establish a leading position in the field of special chemicals for surface engineering.
Profit forecast and investment rating. We expect the company's EPS from 2016 to 2018 to be 0.59,0.71 and 0.92 yuan. The company is the first unit in the domestic surface engineering chemicals industry, focusing on the development and production of surface engineering chemicals for many years, and leading technology. As there are no listed companies in the same subdivision industry in China, the listed companies in the coating materials industry with similar business are selected as comparable companies. The company's share price is currently valued at about 96 times its 2017 valuation, much higher than the average valuation of a comparable company, so it covers the temporary rating for the first time.
Risk hint. The risk of raw material price fluctuation and the risk that the fund-raising project does not meet the expectations.