The first trading day in 2022 (January 4) is the online subscription day of Xinghui environmental materials (300834), a gem company. The issuance price of the company is 55.57 yuan. The prospectus shows that the company is a high-tech enterprise specializing in the R & D, production and sales of polymer synthetic material polystyrene (PS). The company’s products include high impact polystyrene (HIPS) and general-purpose polystyrene (GPPS), both of which are high-tech products in Guangdong Province.
Thanks to the favorable policies of the industry and the continuous embodiment of the company’s competitive advantage, Xinghui environmental materials has made outstanding growth performance in recent years.
In 2019, the company realized a net profit of 102 million yuan, with a year-on-year increase of more than 100%; In 2020, the company’s net profit was 221 million yuan, which doubled year-on-year, with earnings per share of 1.52 yuan and return on net assets of 57.1%; Under the background of high net profit base, the company’s benefits still maintained steady improvement in 2021. The company expects the annual net profit in 2021 to be 276 million yuan to 306 million yuan, with a year-on-year increase of 24.82% to 38.39%.
product supply exceeds demand, and the production capacity will be greatly increased
The prospectus of the company shows that polystyrene, as a basic chemical material, is one of the basic materials of the plastic industry. It is widely used in many fields of the national economy, such as electronic appliances, toys, daily plastic products, plastic packaging, building materials, medical devices and so on. The company is located in Guangdong Province, an important gathering place of electronic and electrical appliances, toys, daily plastic products, plastic packaging and other industries in China. Its products are close to the market and have obvious location advantages and first mover advantages.
The business structure of Xinghui ring material is analyzed, and high impact polystyrene (HIPS) is the main source of its profit contribution. The company continued to promote the market expansion of hips products. The output and sales volume of hips products increased rapidly, reaching 89900 tons and 90000 tons respectively by 2020. The compound growth rate of hips output and sales volume reached 17.43% and 15.84% from 2018 to 2020. In the first half of 2021, the sales revenue of hips products reached 607 million yuan, and the proportion of sales revenue increased to 68.33%, The gross profit contributed by hips products accounted for 83.76% of the total gross profit.
After more than ten years of industry accumulation and rapid development, Xinghui ring material has an annual production capacity of 180000 tons of polystyrene series products. It is a leading polystyrene production enterprise in technical level and the second largest polystyrene production scale in South China. With the implementation of the investment project with raised funds, the company’s production capacity will reach more than 300000 tons. According to the prediction of the existing production capacity of the same industry, it will rank first in South China.
Xinghui environmental materials said that hips and its modified materials were included in the guidance catalogue of key products and services in strategic emerging industries (2016 Edition), which greatly promoted the company’s R & D, production and sales of hips and created favorable external conditions for the development of hips products.
favorable policies optimize the supply side of the industry
Since 2017, with the State Council’s proposal to completely ban the entry of “foreign garbage” and the gradual tightening of environmental protection policies, some production enterprises have been forced to shut down, China’s polystyrene production capacity gap has expanded rapidly, and the product supply is in short supply, resulting in a continuous increase in the price difference and price difference rate between polystyrene and raw material styrene, The profitability of Chinese polystyrene manufacturers has also increased rapidly.
Xinghui ring material stressed in the prospectus that the chemical industry in which the company is located belongs to the industry with high energy consumption and high emission, but does not include the sub industry of “primary form plastic and synthetic resin manufacturing (c2651)” in which the company is located. From the company’s own situation, during the reporting period, the company’s average energy consumption per 10000 yuan of income was low, accounting for only 4.60%, 6.30%, 6.48% and 4.38% of China’s energy consumption per 10000 yuan of GDP in the corresponding year. It is a cleaner production enterprise that has passed the review and acceptance of government departments and is not a high energy consuming enterprise.
The policies related to “carbon peak” and “carbon neutralization” have formed potential long-term benefits for Xinghui ring materials, which is expected to significantly slow down the capacity expansion of polystyrene industry. In recent years, with the improvement of the prosperity of the polystyrene industry, it has attracted existing manufacturers to expand production capacity or industry entrants to build new production capacity. With the promulgation and implementation of relevant policies of “carbon peak” and “carbon neutralization”, the capacity expansion speed of the polystyrene industry will slow down and the industry entry barriers will be significantly improved. (South China)
(Securities Times)
