Xinfengming Group Co.Ltd(603225) (603225)
After more than 20 years of intensive cultivation, it has entered the accelerated stage of capacity expansion. Xinfengming Group Co.Ltd(603225) formerly known as Zhongheng chemical fiber, the company has insisted on financing to increase and expand production capacity since its establishment for more than 20 years. At present, the company has filament production capacity of 6 million tons / year and PTA annual production capacity of 5 million tons / year. It extends upward to build a PTA filament integrated industrial chain. The filament output ranks among the top three in China’s civil polyester filament industry, and 600000 tons of polyester staple fiber production capacity was put into operation at the end of November, Enter the staple fiber and open up the second growth curve. At present, the company has developed into a leading chemical fiber enterprise integrating polyester, polyester spinning, texturing and import and export trade, with sales areas covering more than 10 provinces and cities in China and overseas countries and regions.
The profits of the industrial chain are expected to be transmitted to the filament, and the filament industry pattern continues to improve. PX and PTA in the upstream of the industrial chain are still in the stage of capacity launch, and the average capacity growth rate in the next few years will exceed 18% and 20% respectively, with continuous overcapacity. We expect that the competition in the upstream link is fierce, and the profits are expected to be transmitted to the downstream filament link with more differentiated and consumer goods attributes. The productivity concentration of the filament industry continues to increase. In 2020, the industry Cr6 will increase to 57% and is expected to increase to 68% in the long term. The industry oligarchy pattern will intensify. As a leading chemical fiber enterprise, the company’s bargaining power will continue to strengthen. In addition, the textile park extends from Jiangsu and Zhejiang to blossom at multiple points across the country, which is conducive to smooth periodicity and continuous improvement of filament profits.
The company’s profit has increased significantly, “two 10 million tons” to ensure the scale advantage. With the continuous release of the capacity of Dushan energy PTA project, the cost reduction and efficiency increase of filament production were significant, and the net profit in the first three quarters exceeded the annual level of previous years. The four bases of “two lakes and two continents” arranged by the company are distributed in Zhejiang and Jiangsu provinces, with significant location advantages and transportation cost advantages; The company continues to expand its production capacity. Xuzhou Xinyi is building a new polyester material integration project with an annual output of 2.7 million tons. It is expected that the company can achieve filament and PTA production capacity of 10 million tons in the future.
Invest in the construction of new materials, march into staple fiber and enhance competitiveness. In 2020, Zhongyou chemical fiber, a wholly-owned subsidiary, plans to invest in the construction of a new material project with an annual output of 2 million tons of functional flexible customized staple fiber, 1 million tons of functional differentiated fiber and 300000 tons of polyester film in Tongxiang City. According to the company’s announcement on November 25, the 600000 ton functional flexible customized staple fiber project has been put into operation, Xinfengming Group Co.Ltd(603225) is expected to become a leader in the staple fiber industry with the advantage of late development of equipment and advanced information management mode.
Profit forecast: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 2.511/31.58/4.094 billion, with a year-on-year increase of 316.4% / 25.77% / 29.65% and EPS of RMB 1.64/2.06/2.68 respectively. Based on the closing price on December 17, 2021, the corresponding PE is 8.64/6.87/5.30 times. Give a “buy” rating.
Risk warning: risk of large fluctuation of oil price and products; Risk of capacity release less than expected; The deterioration of epidemic situation affects the demand risk; Risks such as untimely data update and industrial capacity adjustment.
