\u3000\u3 Shengda Resources Co.Ltd(000603) 033 Sanwei Holding Group Co.Ltd(603033) )
The company has entered the BDO and degradable material industry chain on a large scale, and the phase I 300000 ton BDO integration project has been officially started
The company is the leader of conveyor belt and rubber V-belt in China. In January 2019, through the acquisition of Guangxi 3D, the company realized the dual main business layout of rubber products + rail transit materials. In August 2021, the company’s BDO and degradable plastic integration project was filed by Wuhai development and Reform Commission of Inner Mongolia. It plans to build 900000 tons of BDO, Shanghai Pudong Development Bank Co.Ltd(600000) tons of PBAT, 300000 years of PTMEG, 100000 tons of GBL and 50000 tons of NMP capacity, and supporting 1.2 million tons of calcium carbide capacity indicators; In October, the energy-saving report of 900000 tons of BDO and degradable plastics integration project was approved by Inner Mongolia development and Reform Commission, and the energy consumption index of 300000 tons of BDO in phase I was implemented; On March 13, 2022, the commencement ceremony of phase I of BDO integration project was held, and strategic cooperation was signed with Xiaoxing group, the global leader in spandex. The main production capacity includes 360000 tons of calcium carbide, 300000 tons of BDO and 100000 tons of PBAT. It is planned to be ready for production before June 2023. The construction of BDO project will contribute to the substantial growth of the company’s future performance and lay a solid foundation for the later development of high value-added fine chemical business.
BDO will continue to be tight in supply and demand in the future, and the company’s performance will be very flexible
In 2021, benefiting from the large increase in demand for downstream spandex and degradable plastics, the price of BDO increased from 12600 yuan / ton at the beginning of the year to 31000 yuan / ton, an increase of nearly 1.5 times, and remains at a high level of 28000 yuan / ton at present; We expect that by 2023, the market of degradable plastics, spandex, PBT and lithium battery cathode solvent NMP will continue to grow rapidly, with a total demand of 1.64 million tons of BDO. On the supply side, the BDO capacity will be 2.16 million tons and the output will be 1.74 million tons in 2021. Although the planned capacity is large, it is expected to increase the BDO capacity by 1.1 million tons in the next two years due to factors such as energy consumption indicators. Considering that the backward production capacity of raw calcium carbide will continue to withdraw, the BDO probability will maintain a tight balance before 2025. The company has significant advantages in integration. Based on the conservative calculation of BDO price of 15000 yuan / ton, the net profit of 300000 tons of BDO in phase I can contribute 2.1 billion yuan, and the net profit of 900000 tons of BDO in the future can contribute 6.2 billion yuan.
The profit of traditional tape is stable, and the prospect of rail transit materials is considerable
The company’s traditional rubber tape business is growing steadily. Its downstream is mainly industry and automobile, and the industry continues to grow. The gross profit margin of the company’s rail transit materials is as high as 50%. By 2021, the signed contract has exceeded 3 billion yuan. It is expected that the rail transit business will continue to promote the Chengdu Model Based on the five production bases in the future, with considerable development prospects in the future.
Profit forecast and investment rating
It is estimated that the operating revenue of the company from 2021 to 2023 will be 2.9/3.2/4.6 billion yuan respectively, the net profit attributable to the parent company will be 2.39/4.56/9.91 billion yuan respectively, and the EPS will be 0.40/0.77/1.66 yuan respectively, corresponding to the closing price of 23.80 yuan on March 25, and the PE will be 59 / 31 / 14 times respectively. Considering the rapid development of the company’s rail transit material business and the launch of products such as BDO and degradable plastics on a large scale, the profits of new projects will be released from the second half of 2023, giving 20 times PE in 2023 and a target price of 34.00 yuan, which has 43% upside space compared with the current stock price. It will be covered for the first time and given a “buy” rating to the company.
Risk tips
The risk of sharp fluctuations in raw material prices, the impact of the epidemic, and the risk of delayed production of BDO.
