Concrete admixture: the “hero behind the scenes” of engineering projects
Concrete admixtures refer to substances added before or during concrete mixing to improve the performance of fresh concrete and / or hardened concrete. Concrete admixtures are characterized by many varieties and small dosage, which play an important role in concrete modification. Superplasticizer accounts for about 2 / 3 of concrete admixtures and is the most mainstream product among admixtures. The polycarboxylic acid water reducer has the advantages of low content and high water reduction, and can prepare high-strength, ultra-high strength, high durability and superfluid concrete; Compared with other types of water reducing agents, polycarboxylic acid water reducing agent synthesis process has no factors such as waste liquid, waste gas and waste residue discharge. It is a green and environment-friendly high-performance water reducing agent with obvious advantages in environmental protection and efficiency. With the expansion of production capacity and the improvement of permeability, polycarboxylic acid water reducer has become the main variety of water reducer production and consumption in China.
The construction of major projects is accelerated, and the demand for admixtures is expected to increase
Under the background of the expected continuous warming of “steady growth”, the increase in the demand for concrete caused by the increase in the planning of major projects and the advance of construction progress will increase the demand for concrete admixtures at the same time. Moreover, according to the government work reports issued by all provinces, infrastructure construction such as transportation and water conservancy projects account for a large proportion of major projects, and the above engineering construction has high requirements for the performance of concrete, while high-performance water reducing agent is important to meet the needs of concrete pumping construction and the vibration reduction and even vibration free needs of special concrete projects, Compared with other types of admixtures, it has obvious advantages. Therefore, the demand proportion of high-performance water reducing agent that can realize “tailor-made” of engineering projects is expected to further increase.
The increasing trend of industry concentration continues, and the advantages of leading technologies and services are prominent
In 2020, the CR3 of the water reducing agent industry was 15.34%. Although the market share of leading enterprises has increased significantly in recent years, the industry concentration is still very low and there is great room for improvement. We believe that with the continuous expansion of the scale of leading enterprises and the liquidation of small and medium-sized enterprises, the pricing power of water reducing agent enterprises is expected to be improved; At the same time, the concentration of major customers in the downstream, including commercial mixing stations, is also increasing, and the engineering major customers in the direct sales channel gradually adopt the centralized purchase mode for water reducing agents. The increasingly strong b-end attribute of the industry will lead to the standardization of product pricing, which will essentially enhance the bargaining power and enhance the position of the industrial chain for leading enterprises. In addition, the increase in the proportion of machine-made sand increases the dosage of water reducing agent, while the overall requirements of customers for the performance of water reducing agent are improved, resulting in the improvement of customized demand and product premium, and this part of the dividend will be exclusively enjoyed by leading enterprises with strong comprehensive strength.
The strong are always strong, and the pattern is clear, α And β Opportunity coexistence
The three major listed companies in the admixture industry have successively issued production expansion plans. We believe that driven by the catalysis on the demand side and the continuous production expansion of the leading enterprises, the water reducing agent industry will maintain a high outlook in the short and medium term, and the leading enterprises also have high performance certainty.
At present, we continue to be optimistic about investment opportunities in the water reducing agent sector, mainly based on:
1) the demand side is driven by many factors, such as the increase of concrete ready mixing rate, the increase of machine-made sand permeability, the increase of cement and gravel aggregate prices, and the growth rate (especially the growth rate of polycarboxylate superplasticizer demand) will be significantly higher than that of the downstream concrete industry;
2) there are technical and service barriers in the water reducing agent industry. If new entrants want to further obtain a large market share and occupy the link with high gross profit in the industrial chain, that is, customized mother liquor compounding and supporting services according to customer needs, they will face a higher entry threshold;
3) the increase of industry concentration is an inevitable trend, and it will accelerate in 2022. Objective factors include the clearing of production capacity brought by environmental protection regulation, and the active or passive exit of small and medium-sized enterprises due to environmental protection costs / long account period / low gross profit; Subjective factors include that leading enterprises continue to seize market share, and the financing assistance of the capital market will further strengthen the barriers of leading enterprises in capital and R & D;
4) factors such as the increase of concentration, the increase of total demand, the change of demand structure and the increase of scale effect will gradually enhance the industrial chain status of leading enterprises, and then enhance the bargaining power of upstream and downstream.
Investment advice
We think Sobute New Materials Co.Ltd(603916) there is still a big gap in expectations, and the alpha opportunity deserves attention. In addition to the main business of water reducing agent, the company’s functional material business reflects the underlying product logic that is very different from its competitors. In the future, it will be able to replicate the success of water reducing agent business, and the ceiling of market space is much higher than that of water reducing agent. We believe that the company’s technical barriers and broad market space have not been fully recognized, and it is expected to continue to break through the growth boundary and grow into a comprehensive supplier of new civil engineering technologies and materials in the future.
Risk tips
The implementation of policies related to “steady growth” is less than expected; The growth rate of infrastructure and real estate investment has decreased significantly, which is at risk; The improvement of concrete commercialization rate is less than expected; The price rise of raw materials such as ethylene oxide exceeded expectations.
