\u3000\u3000 Yantai Tayho Advanced Materials Co.Ltd(002254) (002254)
I. “spandex + aramid” double main industry, with technical advantages laying the foundation for long-term growth
The company is engaged in the R & D and production of spandex, aramid and other high-performance fibers, and has independent localization technology, forming three product segments of spandex, meta aramid and para aramid.
After years of development, the company took the lead in realizing the industrialized production of spandex, meta aramid and para aramid in China, successively filled a number of gaps in China’s high-performance fiber field, and formed ten product systems dominated by three product sectors.
The company’s leading products are nuosta ® Spandex, temec ® Meta aramid, tapron ® Para aramid, minstar ® Aramid paper and its upstream and downstream products have excellent properties, which can improve the functions of downstream products, and are widely used in many fields.
II. Spandex leading enterprises are still actively expanding, and the company’s new and old kinetic energy conversion is developing steadily
Spandex is the abbreviation of polyurethane fiber. It is an elastic fiber with the earliest development, the widest application and the most mature production technology. Spandex has many advantages, such as corrosion resistance, heat resistance, aging resistance and good affinity to dyes. It is widely used in textile and clothing, medical care and automotive interior decoration. It is an essential monosodium gluten textile material in modern textile and garment industry.
The most common specifications of spandex are 20d, 30d, 40d, 70D and 140d, of which 40d accounts for more than 50%. It is widely used in machine bag, empty bag, cotton bag, weft knitting and warp knitting; In recent years, the proportion of fine denier silk such as 20d has increased rapidly, especially in the fields of underwear, socks and circular knitting machine; 70D and 140d above are mainly used in the fields of health and epidemic prevention such as lace, webbing, sock mouth and mask ear belt; Coarse denier silk with larger size is mainly used in webbing and paper diapers.
III. the aramid business of the company continues to increase, leaping from a Chinese leader to an international leader
Aramid fiber, fully known as aromatic polyamide fiber, is a new type of high-tech synthetic fiber, mainly including meta aramid (aramid 1314), para aramid (aramid 1414), heterocyclic aramid, etc. it has excellent properties such as ultra-high strength, high modulus, high temperature resistance, acid and alkali resistance, light weight and so on.
Aramid fiber has a wide range of applications. It has important applications in traditional fields such as national defense and military industry. It also shows great potential in emerging fields such as new energy vehicles and 5g communication.
IV. investment suggestions
As of February 8, the company’s PE (TTM) was 16.2x, which was significantly lower than the valuation of more than 40x during 2018-2019 when the spandex business lost and the aramid business contributed to the profit. It is suggested that the spandex and aramid businesses of the company adopt segment valuation, with 10xpe for spandex business and 30xpe for aramid business.
Key assumptions: 1 New projects reach production capacity on schedule; 2. The prosperity of spandex industry has stabilized; 3. Aramid demand continued to improve, the product structure continued to shift to high-end, and the industry maintained a high boom.
We estimate that the company’s revenue from 2021 to 2023 will be 4.28 billion yuan, 6.35 billion yuan and 7.27 billion yuan respectively, and the net profit attributable to the parent company will be 980 million yuan, 1.0 billion yuan and 1.08 billion yuan respectively; Earnings per share (EPS) were 1.44, 1.46 and 1.57 yuan respectively.
We believe that the high boom of spandex industry in 2021 will lead to high performance growth, and the increase of aramid production and sales will also lead to some performance increment; With the gradual expansion of aramid production and product structure adjustment, aramid business will be an important growth pole of the company’s performance in the future. Optimistic about the investment opportunities brought by the continuous expansion of the company’s aramid business, rated it for the first time and gave it a “recommended” rating.
V. risk warning
The risk that the downstream demand is less than expected, the risk that the price of raw materials rises sharply, and the risk that the output of new projects is less than expected.
