Xinhecheng (002001): Great growth momentum of crowned King of Fine Chemicals continues to brew
A thriving fine chemical company was established in 1999 and listed on the SME Board in 2004, making it the first listed company on the SME Board.
The company’s four major businesses are military nutrition products, flavors and fragrances, new materials and raw materials, and it is the leader in domestic fine chemicals.
The huge profit of the company’s budget has the ability to invest in a large number of new projects. According to our statistics, the total investment of the company’s new environmental impact assessment project since the beginning of 2018 has exceeded 20 billion US dollars, and huge growth momentum is brewing.
Vitamin A: oligomeric activated carbon, integrated industry chain as the core competitiveness of vitamin A and Jin Dawei 6 suppliers, the industry CR4 is as high as 78%.
Although the industry has additional production capacity in the future, it can supplement leading manufacturers to expand production, and the industry structure will change.
According to our estimates, African swine fever affects domestic VA 6.
5% of demand, taking into account the global impact is less than 4%, far less than the impact of DSM shutdown on the supply side.
Vitamin E: DSM intends to acquire Nantec Technology Control Panel VE, and the oligopoly layout gradually strengthens the global VE industry CR4 by about 62%, which is also an oligopoly pattern.
Beginning in 2016, the former VE main ring intermediate supplier Nente Technology entered VE terminal products, resulting in increased competition in the industry.
Recently DSM acquired the vitamin E-related business of Amyris, an intermediate supplier of Ntech’s side chain, and reached an agreement with Ntech to acquire 75% of its VE terminal products and main ring intermediate assets, and acquired sidechain production assets25% equity, which firmly controls the production capacity of Nent’s VE final products and gains control of a relatively small number of main ring intermediates. The industry oligarch can give great stability.
Methionine: The oligonucleotide itself remains unchanged, and the competition in production capacity is beginning to see its beginnings. Due to the extremely high barriers in the methionine industry, CR3 is as high as 87%, and the supply-side structure is excellent.
However, due to the competition of oligopoly manufacturers’ capacity, the deterioration of the industry’s supply-demand relationship has led to continued decline in prices.
Although the current methionine price has rebounded, it is still in the bottom area. The subsequent anti-dumping tailoring quota and the 北京夜生活网 gradual break of the capacity competition will greatly improve the industry supply and demand expectations. The company’s existing capacity 5 will be replaced, and the second phase 10 is expected to start production at the end of the year.
Entered the flavoring, bio-fermentation, new materials and other industries. The company entered the maltol, sucralose, PPS and other industries during the siege. The 6,000 tons of maltol had been trial-produced in May 2018. The total investment of sucralose and VB6 projects470,000 yuan, the second public announcement of the environmental impact assessment in December 2018.
The Heilongjiang bio-fermentation project of 3.6 billion yuan was announced in March 2018.
In addition, at least 2 PPS and 1 inserted PPA projects are carried out as planned at the same time.
It is expected that the company’s net profit attributable to mothers in 2019, 2020 and 2021 will be 26.
400 million, corresponding to PE 16.
4x, upgrade to buy rating.
Risk analysis Safety production risks, production capacity is less than expected risks, and industry competition intensifies risks.