On April 1, the Shanghai Stock Exchange announced that the A shares of Zhongfu Shenying (688295, SH) will be listed and traded on the science and innovation board. The a share capital of the company is 900 million shares, of which 68844057 shares will be listed and traded from April 6.
Zhongfu Shenying is one of the leaders in China’s carbon fiber industry. In 2013, the company took the lead in breaking through the industrial manufacturing technology of thousand ton carbon fiber precursor dry jet wet spinning in China, and built China’s first thousand ton dry jet wet spinning carbon fiber industrial production line.
Zhongfu Shenying issued 100 million new shares in this IPO, accounting for 11.11% of the total share capital after issuance. The issue price was 29.33 yuan / share, and the net fund raised reached 2.777 billion yuan. It is mainly used to invest in Xining project with an annual output of 10000 tons of high-performance carbon fiber and supporting precursor, aerospace high-performance carbon fiber and precursor test line project, carbon fiber aviation application R & D and manufacturing project, and supplement working capital.
the company’s performance has increased rapidly in recent three years
According to the prospectus, Zhongfu Shenying is a national high-tech enterprise specializing in the R & D, production and sales of carbon fiber, and the products sold abroad are mainly carbon fiber. From 2018 to 2020, the company’s operating revenue was 308 million yuan, 415 million yuan and 532 million yuan respectively, and the net profit attributable to the parent company was 244799 million yuan, 266511 million yuan and 852318 million yuan respectively, showing an obvious growth trend.
Among them, the income of products that can be applied to aerospace, rail transit, marine engineering, wind power equipment and pressure vessels has increased continuously, from 436713 million yuan in 2018 to 138 million yuan in 2020, with an average annual compound growth rate of 78.04%, and the proportion in the operating income of the current year has increased from 14.18% to 26.01%, Including “carbon / carbon composites for high temperature furnace”, “carbon / carbon composites for aviation braking”, “high performance carbon fiber prepreg”, “carbon fiber composites for automobile” and other key strategic materials.
Based on the mature dry jet wet spinning industrialization technology system, Zhongfu Shenying has realized the large-scale production and batch supply market of high-performance carbon fiber, and has supplied more than 20000 tons of carbon fiber to the market since its establishment. The headquarters of the company is located in Jiangsu Lianyungang Port Co.Ltd(601008) with an existing production capacity of 3500 tons / year. From 2018 to 2020, the output was 297989 tons, 334215 tons and 377721 tons respectively, and the sales volume was 273494 tons, 342248 tons and 376114 tons respectively.
According to the statistics of China National Chemical Engineering Co.Ltd(601117) Fiber Industry Association, the total output of domestic carbon fiber in 2020 was 18000 tons, and that of Zhongfu Shenying in 2020 was 377721 tons, accounting for 20.98% of China’s total carbon fiber output, ranking second in China’s carbon fiber output; In 2020, the total consumption of carbon fiber in China reached 48800 tons. In 2020, the company sold 362528 tons of carbon fiber in China, with a market share of 7.43%.
The prospectus also disclosed that in 2021, the operating revenue of Zhongfu Shenying was 1.173 billion yuan, with a year-on-year increase of 120.44%, and the net profit was 279 million yuan, with a year-on-year increase of 227.02%. The main reason is that in recent years, the demand of Chinese downstream customers for carbon fiber has continued to grow, and the application field of carbon fiber and its composite materials has expanded rapidly, driving the continuous improvement of the sales quantity and sales unit price of the company’s related products.
Zhongfu Shenying expects that in the first quarter of 2022, the company’s performance will increase compared with the same period of last year. The estimated operating income is 400 million yuan to 450 million yuan, an increase of 186.37% to 222.16% over the same period last year; The net profit attributable to the parent company was 80 million yuan to 90 million yuan, an increase of 106.93% to 132.8% over the same period last year.
core technology independent research and development
Carbon fiber has excellent mechanical properties and chemical stability, lower density than aluminum and higher strength than steel. It is widely used in aerospace, wind power blades, sports and leisure, pressure vessels, carbon / carbon composites, transportation construction and other fields.
After more than ten years of technological research and development, Zhongfu Shenying has broken through the core technologies such as super capacity polymerization, dry jet wet spinning, rapid homogeneous pre oxidation and carbonization, systematically mastered the thousand ton technology of carbon fiber T300, T700, T800, M30 and M35 and the hundred ton technology of M40 and T1000, and built the first thousand ton dry jet wet spinning carbon fiber industrialization production line with independent intellectual property rights in China.
Zhongfu Shenying has also established a team with young and middle-aged people as the backbone through independent cultivation. Its R & D field covers various technological processes of oil sizing agent, polymer spinning, precursor and carbon filament production. Its core members have made a series of important research achievements in the preparation of high viscosity spinning stock solution suitable for dry jet wet spinning, rapid spinning technology of polyacrylonitrile based precursor, efficient and rapid pre oxidation technology, etc, The core technology with independent technical design and process technology has been formed, and the batch supply of carbon fiber with stable quality has been realized.
It is reported that by the end of June 2021, the R & D personnel of Zhongfu Shenying accounted for 2.16% of the total number of employees, and the R & D investment from 2018 to January June 2021 was 11.515 million yuan, 11.224 million yuan, 171796 million yuan and 159707 million yuan respectively, accounting for 3.74%, 2.70%, 3.23% and 4.19% of revenue respectively. At present, the company has obtained 26 invention patents and 41 utility model patents.
In January 2018, recommended by China Textile Industry Federation, the “key technology and application of 1000 ton dry jet wet spinning high strength / medium model carbon fiber industrialization” project completed by Zhongfu Shenying as the first completion unit and Zhongfu Shenying core technicians as the main completion personnel won the first prize of 2017 National Science and technology progress award.
The project has developed a 2m wide kiloton carbonization line process package, built a 1000 ton / year large-scale production line and realized stable production through four technological breakthroughs: super large capacity polymerization kettle technology, high orientation and low defect precursor dry jet wet spinning high-speed spinning technology, rapid pre oxidation technology and independent research, development and integration of key equipment.
At the same time, the relevant technologies formed by the project constitute the core technology of Zhongfu Shenying. Through continuous technology research and development, the company has gradually formed and improved four core technology systems, and applied the relevant technologies to the R & D and production process of high-performance carbon fiber. During the reporting period, the revenue of the company’s core technology products accounted for more than 98%, Compliance with paragraph (2) of Article 6 of the Interim Provisions on the issuance and listing application and recommendation of science and Innovation Board enterprises of Shanghai Stock Exchange.
domestic carbon fiber is still in short supply
In 2020, China’s carbon fiber demand reached 48800 tons, an increase of 29% over 2019. In China’s carbon fiber demand in 2020, the supply of imported carbon fiber is 30400 tons, accounting for 62% of the demand; The supply of domestic carbon fiber is 18400 tons, accounting for 38% of the demand. Compared with 32% in 2019, domestic carbon fiber accounts for an increase of 6 percentage points, and the domestic substitution trend is obvious.
On the one hand, due to the impact of the epidemic, it is more difficult to import carbon fiber; On the other hand, Japan, the United States and other major carbon fiber producing countries have tightened the supply of carbon fiber, resulting in an increase in China’s demand gap. Affected by this, the supply of domestic carbon fiber in 2020 increased by 53% compared with 12000 tons in 2019, and the domestic carbon fiber industry maintained rapid growth. At present, the supply of imported carbon fiber is still significantly higher than that of domestic, and there is a huge space for domestic substitution.
In addition, as the international wind power main engine plants shift the OEM of carbon fiber pultruded sectors from Europe to China, wind power blades have become one of the larger carbon fiber application fields in China. In 2020, China’s demand for carbon fiber in the field of wind power blades was 20000 tons, accounting for 41% of China’s total demand, an increase of 45% compared with 13800 tons in 2019. The proportion of carbon fiber application in wind power field is expected to further increase in 2021.
The market demand for wind power blades is mainly the application of foreign wind power hosts, and the consumption of hosts in China is relatively small. The products used are mainly T300 grade 24K, 48K, 50K and other products outside China. The consumption of carbon fiber is large, but it is highly sensitive to price. In recent years, the rapid growth of wind power blade demand for carbon fiber has brought rapid development opportunities for Chinese carbon fiber enterprises.
It is worth noting that for a long time, the supply of imported carbon fiber in China’s carbon fiber market far exceeds that of domestic carbon fiber. Since 2020, affected by the global covid-19 epidemic, the overall global trade has been greatly impacted, the difficulty of foreign carbon fiber export to China has increased, and the overall supply of China’s carbon fiber market is in short supply.
Meanwhile, with the rapid growth of carbon fiber demand in the field of wind power blades since 2019, the demand for domestic carbon fiber has increased significantly, and the profit space of Chinese carbon fiber enterprises has been increasing. In the future, domestic carbon fibers will have broad application prospects in high value-added fields such as aerospace, pressure vessels and carbon / carbon composites. Enterprises with independent intellectual property rights and sustainable innovation ability will take the lead in the future competition.
For Zhongfu Shenying, in the first half of 2021, part of the project with an annual output of 10000 tons of high-performance carbon fiber and supporting precursor in Xining was put into operation, and the company’s new production capacity reached 2000 / T / A and 5500 / T / A; Meanwhile, according to the fund-raising and investment plan, the project with an annual output of 10000 tons in Xining will be completed in March 2022, and the remaining 8000 tons / capacity is expected to be put into operation gradually. According to the development plan released by the company on its website, the company expects to build a 20000 ton carbon fiber production base in Xining in 2025 and a 100000 ton carbon fiber production base in 2030. In the next few years, the company’s large-scale capacity construction is expected to continue to promote at a high speed.
