Jiangsu Eastern Shenghong Co.Ltd(000301) ‘s whole industry chain investment has taken another step.
On the evening of March 23, Jiangsu Eastern Shenghong Co.Ltd(000301) announced that Honghai new materials (Suqian) Co., Ltd. (hereinafter referred to as “Honghai new materials”), a secondary wholly-owned subsidiary of the company, plans to invest in the construction of the “intelligent functional fiber project with an annual output of 1 million tons”, with a total investment of 6.655 billion yuan. The project is planned to be implemented in two phases, and the construction period of each phase is proposed to be two years.
Meanwhile, Jiangsu Lianyungang Port Co.Ltd(601008) Hongke new materials Co., Ltd. (hereinafter referred to as “Hongke new materials”), the company’s three-level holding subsidiary, plans to invest in the construction of “degradable materials project (phase I)”, with a total investment of 7.471 billion yuan and a construction period of 3 years.
On March 24, Jiangsu Eastern Shenghong Co.Ltd(000301) fell 0.66% to close at 15.08 yuan.
open up the upstream and downstream of refining and chemical
On the evening of March 23, Jiangsu Eastern Shenghong Co.Ltd(000301) issued two announcements in a row, namely, the “annual output of 1 million tons of intelligent functional fiber project” of RMB 6.655 billion and the “degradable material project (phase I) project” of RMB 7.471 billion
Among them, “the project of intelligent functional fiber with an annual output of 1 million tons” is planned to be built in the economic development zone of Siyang County, Suqian City, Jiangsu Province. The project plans to “produce intelligent functional fiber with an annual output of 1 million tons, mainly including 42 polyester filament POY (pre oriented yarn) production lines, 6 FDY (fully drawn yarn) production lines, production plants and auxiliary facilities”.
“Degradable materials project (phase I)” is proposed to be built in Jiangsu Lianyungang Port Co.Ltd(601008) petrochemical base in Xuwei new area, Jiangsu Lianyungang Port Co.Ltd(601008) City, Jiangsu Province. The project proposes “340000 T / a maleic anhydride unit, 300000 t / a BDO unit, 180000 T / a PBAT unit and public and auxiliary facilities”.
“Siyang is close to Jiangsu Lianyungang Port Co.Ltd(601008) and the logistics is also very convenient.” On March 24, Jiangsu Eastern Shenghong Co.Ltd(000301) relevant persons told the 21st Century Business Herald reporter that the company’s investment in these two projects is mainly the upstream and downstream industrial chain supporting project of the 16 million ton refining and chemical integration project of Shenghong refining and Chemical Co., Ltd. (hereinafter referred to as “Shenghong refining and chemical”). “The raw materials of the two new projects can come from Shenghong refining and Chemical Co., Ltd.”
For example, “degradable materials project (phase I)” takes n-butane produced by Shenghong refining and chemical integration project as raw material for deep processing, uses maleic anhydride method to produce 1,4-butanediol, and further produces PBAT degradable materials in combination with PTA produced by Jiangsu Honggang Petrochemical Co., Ltd., a secondary wholly-owned subsidiary of the company, so as to extend the industrial chain to the downstream, improve the added value of products, and improve the comprehensive competitive strength and profitability of the enterprise.
where does the investment fund come from
The total amount of the above two investments is about 14.126 billion. Can the monetary capital of Jiangsu Eastern Shenghong Co.Ltd(000301) support this huge investment?
By the end of the third quarter of 2021, Jiangsu Eastern Shenghong Co.Ltd(000301) had monetary capital of 17.187 billion yuan, but its short-term borrowings were also 8.326 billion yuan, non current liabilities due within one year were 2.242 billion yuan, and long-term borrowings reached 42.108 billion yuan.
In terms of current assets as a whole, Jiangsu Eastern Shenghong Co.Ltd(000301) is 26.539 billion yuan, while current liabilities are 26.506 billion yuan. There is almost no difference between the two.
According to the data, by the end of the third quarter of 2021, Jiangsu Eastern Shenghong Co.Ltd(000301) ‘s asset liability ratio was 76.96%, significantly higher than 59.62% at the end of the third quarter of 2020; Meanwhile, Jiangsu Eastern Shenghong Co.Ltd(000301) has a current ratio of 1, a quick ratio of 0.84 and a cash to maturity debt ratio of – 0.21%.
the above Jiangsu Eastern Shenghong Co.Ltd(000301) person said that the capital of the company’s investment in the two new projects is mainly its own capital and bank loans. “There is no problem with the capital. When 16 million tons of refining and chemical are put into operation, we have a lot of cash flow, so investors don’t have to worry about the problem of capital.”
The 21st Century Business Herald reporter noted that according to the original plan, the 16 million ton refining and chemical integration project of Shenghong refining and chemical should be completed and put into operation in 2022. Once the project is completed, the PX produced by Shenghong refining and chemical will be directly supplied to Jiangsu Honggang Petrochemical Co., Ltd. (hereinafter referred to as “Honggang petrochemical”) through the pipeline to produce PTA. The PTA produced by Honggang petrochemical and MEG produced by Shenghong refining and chemical will be further supplied to Jiangsu Guowang high tech fiber Co., Ltd. to produce differentiated chemical fibers (POY, FDY, DTY, etc.) Jiangsu Eastern Shenghong Co.Ltd(000301) will form a whole industrial chain business from “one drop of oil” to “one silk”.
“The project construction has been completed. At present, there are still some procedures not completed. It will be put into trial operation soon.” Said the above Jiangsu Eastern Shenghong Co.Ltd(000301) person.
market value correction
Since the reorganization and listing, the share price of Jiangsu Eastern Shenghong Co.Ltd(000301) has risen well, rising to 41.30 yuan on September 16, 2021, and the market value of the company has reached 199681 billion.
However, from that day on, Jiangsu Eastern Shenghong Co.Ltd(000301) began to decline all the way. On March 9, 2022, it once fell to RMB 14.18, and the market value of the company fell to RMB 84.321 billion.
On March 24, Jiangsu Eastern Shenghong Co.Ltd(000301) fell 0.66% to close at RMB 1508. The market value of the company was 89.673 billion, an increase of more than 5 billion from the previous low.
“The main reason is that the previous organization made too much money, so it didn’t hurt to sell.” A chemical industry analyst of a securities firm told the 21st Century Business Herald that many funds have a cost of more than 6 yuan. “The highest cost is 11 or 12 yuan, up to more than 40 yuan, and they must run”.
However, judging from the fund’s 2021 fourth quarter report, many funds still increase their positions, such as the emerging power of Shanghai Investment Morgan, the vision of Shanghai Investment Morgan for two years, Baoying Hongli, e-fangda core intelligent manufacturing, Golden Eagle reform dividend, China’s advantages of Shanghai Investment Morgan, Baoying high-quality growth, Penghua selected growth and other funds, all increase their positions by more than 1 million shares.
Jiangsu Eastern Shenghong Co.Ltd(000301) disclosed the performance forecast for 2021, which showed that the net profit attributable to the parent company was 4.1-5 billion yuan, with a year-on-year increase (adjusted) of 435% – 552%.
Zhao naidi, analyst of Everbright Securities Company Limited(601788) chemical industry, believes that after Jiangsu Eastern Shenghong Co.Ltd(000301) acquired sierbang, the whole refining and fine chemical industry chain was opened, and the company’s main business was further expanded and the R & D, production and sales of value-added olefin derivatives were newly increased, which could give full play to the synergy between refining and chemical integration project and sierbang petrochemical. Therefore, the profit forecast of Jiangsu Eastern Shenghong Co.Ltd(000301) is raised. It is estimated that the net profit of the company from 2021 to 2023 will be 48.41 (up 162%) / 88.74 (up 24%) / 124.03 (up 29%) billion yuan respectively, maintaining the “buy” rating.
