Summary:
The company’s core focus and IPO offering and Investment: (1) the company is the main supplier of ABL outside China. It is one of the only two ABL production enterprises in China with an annual output of more than 5000 tons / year. It has established a close relationship between supply and demand with Bayer, Laurence and other large multinational groups. The company’s core products are abl and E2, which account for more than 50% of the revenue contribution. As the core raw material of the core product of Bayer Group, ABL has maintained a stable growth in sales. With the entry of Lorens tle400 and tle600 three drug mixture products into the U.S. market in 2020, it will continue to drive the revenue growth of the company’s E2 products in the future. (2) The company’s public offering is no more than 27 million shares, and the total share capital after issuance is no more than 108 million shares. The company plans to invest a total of 716 million yuan in the raised funds of the project. It is expected that the completion of the project will further improve the company’s R & D technology capacity, mass production capacity and market share.
Main business analysis: the company is mainly engaged in the R & D, production and sales of fine chemicals dominated by pharmaceutical intermediates, pesticide intermediates, electronic chemicals and chemical solvents. Benefiting from the promotion of market demand, the company’s performance has gradually improved, and the compound growth rate of revenue and net profit attributable to parent company from 2018 to 2020 reached 21.45% and 83.65% respectively. With its product quality and brand effect, the company’s revenue and gross profit continued to increase, and the expense rate remained stable during the period. Among them, ABL, E2, Cpmk and HDO were the main sources of gross profit.
Industry development and competition pattern: the rapid development of downstream markets such as medicine, pesticides, electronic chemicals and cosmetics has brought new development opportunities to the fine chemical industry. Fine chemical products will gradually develop in the direction of high performance, specialization and greening. The development potential of the fine chemical industry is huge.
At present, the fine chemical industry is a fully competitive market and has not formed an obvious industry monopoly. It will develop in the direction of collectivization and intensification in the future.
Valuation of comparable companies: the company’s industry “C26 chemical raw materials and chemical products manufacturing industry” has a static P / E ratio of 40.28 times in the past month (as of March 24, 2022). According to the disclosure of the prospectus, Nantong Acetic Acid Chemical Co.Ltd(603968) ( Nantong Acetic Acid Chemical Co.Ltd(603968) . SH), Jiangsu Yida Chemical Co.Ltd(300721) ( Jiangsu Yida Chemical Co.Ltd(300721) . SZ), Zhejiang Xinhua Chemical Co.Ltd(603867) ( Zhejiang Xinhua Chemical Co.Ltd(603867) . SH), Zhejiang Jianye Chemical Co.Ltd(603948) ( Zhejiang Jianye Chemical Co.Ltd(603948) . SH) is selected as the comparable company. As of March 24, 2022, the corresponding average PE (Lyr) of comparable companies in 2020 is 23.89 times.
Risk tips: 1) the risk of macroeconomic fluctuations affected by the epidemic; 2. Risk of product price decline.
