\u3000\u3 Shengda Resources Co.Ltd(000603) 055 Zhe Jiang Taihua New Material Co.Ltd(603055) )
Zhe Jiang Taihua New Material Co.Ltd(603055) nylon products with differentiated layout have obvious advantages in the industry and are recognized by downstream high-quality customers. Founded in 2001, the company focuses on the R & D and production of high-end functional fabrics. At present, it has formed a complete industrial chain integrating nylon spinning, weaving, dyeing and finishing. The company focuses on the R & D and production of nylon 6, nylon 66 and nylon environmental protection recycled series products and other chemical fiber products. It customizes and develops a series of high-grade functional fabrics such as environmental protection and health, outdoor sports and special protection for customers all over the world. It is a global leader in green multi-functional nylon silk and high-grade functional fabrics. The company's main products are nylon filament, grey cloth and functional finished fabrics, accounting for 80% of the revenue. In addition, it also produces a small amount of polyester products.
Nylon fiber benefits from the prosperity of sportswear, and nylon 66 and recycled nylon become the trend. The demand side of nylon is dominated by civil and military sportswear products. Benefiting from the popularity of sportswear and the localization of nylon chips, the output of nylon fiber continues to grow, and the proportion of nylon output in chemical fiber maintains an upward trend. In 2020, the output of nylon fiber accounted for about 6% of chemical fiber, which has room for improvement compared with the global level of 9%. With the popularity of outdoor sports in China, the proportion of nylon is still expected to increase. Nylon 66 and recycled nylon are long-term trends. 1) Development of nylon 66: the main properties of nylon 66 are stronger than the current mainstream nylon 6. It is a better sportswear material, and the average selling price is much higher than that of nylon 6. The production process of adiponitrile, the necessary raw material in the upstream of PA66, is complex. In recent years, it has just broken the monopoly of overseas manufacturers, and the production capacity is being released in China. Enterprises mastering the production process of nylon 66 are expected to fully benefit from the product upgrading opportunity. 2) Development of recycled nylon: all raw materials of recycled nylon come from nylon waste in production or after use, which is polymerized and regenerated by physical or chemical methods. With the popularity of the concept of environmental protection, major brands have responded to recycled materials. At present, China's chemical fiber recovery technology is still in its infancy, and Taiwan China has a certain first mover advantage.
Vertically integrated layout and expand high-quality customer cooperation Zhe Jiang Taihua New Material Co.Ltd(603055) is a rare enterprise in the industry with vertically integrated layout from nylon silk to fabric. The difficulty of vertical integration lies in: vertically, the resource endowment and core competitive elements of each production link of the textile and garment industry chain are different. The significance of vertical integration is that for brand companies, it can improve the efficiency of procurement and reduce the procurement cost. For vertically integrated companies, the layout of the whole industrial chain can save production costs and earn more profits in the industrial chain. In recent years, the gross profit margin of the company has shown an upward trend, which is superior to other competitors in nylon filament industry in terms of high gross profit and stability. Through vertically integrated layout and differentiated products, the company has been continuously recognized by high-quality customers in recent years. At present, Decathlon, Chaoying and other top five customers account for about 20%. In the future, the cooperation with UNIQLO, Anta and other brands will be significantly expanded to support the growth of orders.
Expand production, open up long-term growth space, and strategically arrange nylon 66 production capacity. At present, the company's filament production capacity is 65000 tons and 120000 tons of production capacity being released. The grey fabric production capacity is about 60 million meters, the fabric dyeing production capacity is 160 million meters, and the fabric finishing production capacity is 60 million meters. From the perspective of production capacity details, the proportion of differentiated and functional products of the company will be further increased in the future. In terms of future project planning, the green multifunctional nylon new material integration project is divided into four phases, with a total investment of 12 billion yuan and a span of five years. The first phase of the project is expected to be completed in 2023. With the advancement of the project, the company's advantageous position in the industry will be consolidated.
Profit forecast and investment rating: it is estimated that the company will achieve revenue of RMB 4.205/51.61/6.681 billion from 2021 to 2023, and the net profit attributable to the parent company will be RMB 460 / 600 / 901 million, and the corresponding PE will be 26.25x/20.12x/13.41x respectively. Based on the company's dominant position and future potential in the nylon industry, the company was given a "recommended" rating for the first time.
Risk tip: the epidemic situation is repeated, the demand is lower than expected, the upstream slicing industry extends downstream, and the management changes.
