Zhongfu Shenying (688295)
Zhongfu Shenying: the carbon fiber leader of China building materials. Zhongfu Shenying, founded in 2006, will be listed on the science and Innovation Board on April 6, 2022. In 2013, the company built the first 1000 ton dry jet wet spinning carbon fiber industrialization production line in China, and plans to build a 100000 ton carbon fiber base by 2030. At present, the company has two production bases Jiangsu Lianyungang Port Co.Ltd(601008) , Xining, and the production capacity ranks first in China.
Carbon fiber industry: multidimensional growth of demand. Carbon fiber can meet the needs of lightweight, high strength and high modulus. At present, carbon fiber is widely used in aerospace, infrastructure, industrial applications and other fields. There is great room for domestic substitution. In 2020, China’s demand for carbon fiber will be 48900 tons, of which the supply of domestic carbon fiber will only be 18500 tons, accounting for 38% of China’s total demand. Sao carbon fiber predicts that the domestic carbon fiber supply will reach 83000 tons in 2025 and the CAGR will reach 35% from 2020 to 2025. In China’s carbon fiber demand structure, wind power accounts for the highest proportion, which is different from the global structure: 1) wind power blade: benefiting from the large-scale blade. The future development prospect of Haifeng is optimistic. The blades are becoming larger, which improves the requirements of lightweight and strength and stiffness, so as to drive the demand for carbon fiber. 2) Carbon carbon composites: photovoltaic thermal field materials. The penetration rate of carbon / carbon composites in photovoltaic thermal field materials has increased rapidly. The new installed capacity of photovoltaic in the 14th five year plan has maintained a high growth rate, driving the demand for carbon carbon composites.
Dry jet wet spinning leading enterprises, capacity expansion into the fast lane: (1) technology: dry jet wet spinning leader. After more than ten years of technology research and development, the company has 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 in China. Dry jet wet spinning can significantly improve the production efficiency of carbon fiber. (2) Products: benchmarking Japan’s Toray, focusing on the high-end civil market. Compared with Japanese Toray product models, the company has achieved product coverage from T300 to T1000 and M40, and basically achieved benchmarking; Compared with Chinese manufacturers, the company has basically the same types of carbon fiber products as Weihai Guangwei Composites Co.Ltd(300699) , Hengshen shares. Civil products business accounts for a high proportion and customers are of high quality. (3) Capacity: the scale continues to expand, and there is still room for downward cost. The 10000 ton carbon fiber project of Xining phase 1 has been completed and put into operation by the end of 2021. The remaining 4000 tons of carbon fiber capacity is expected to be put into operation in March 2022, which highlights the scale effect of capacity. In addition, the raised investment project helps to expand capacity.
Analysis of raised investment projects: the IPO company plans to issue 100 million shares of capital stock at an issue price of 29.33 yuan / share, with a total amount of 2.933 billion yuan and a net amount of 2.777 billion yuan. The projects raised and invested include the high-performance carbon fiber and supporting precursor project with an annual output of 10000 tons in Xining, the aerospace high-performance carbon fiber and precursor test line project, and the carbon fiber aviation application R & D and manufacturing project.
Profit forecast and Valuation: we estimate that the company’s revenue from 2022 to 2024 will be RMB 2.095 billion, RMB 3.005 billion and RMB 4.055 billion, and the net profit will be RMB 463 million, RMB 731 million and RMB 984 million. In horizontal comparison, the average PE of the three comparable companies in the carbon fiber industry from April 1 to 2022 to 2023 is about 34x and 23x respectively. Calculated by the issuing price, the PE of the company from 2022 to 2023 is 57x and 36x respectively. From the perspective of carbon fiber industry, the material performance is high-quality, the demand side is growing multidimensional, and the domestic substitution at the supply side is just in time. From the perspective of the company, Zhongfu Shenying is the leader in carbon fiber dry jet wet spinning technology. Its products are benchmarked with Japan’s Toray, with continuous expansion of production capacity and strong growth. Considering that the company has not yet been listed, it will not be rated for the first time.
Risk tip: the new production capacity of the industry is put into operation too fast; Some downstream demand penetration is lower than expected; The price of raw materials fluctuated sharply.
