It is expected that Henan Qingshuiyuan Technology Co.Ltd(300437) (300437) will turn the loss year-on-year in 2021. It is proposed to extend the industrial chain and expand profitability.
invest in the construction of 100000 ton phosphorus pentachloride project
On January 13 Henan Qingshuiyuan Technology Co.Ltd(300437) , it was announced that in order to further improve the layout of the company’s upstream and downstream industrial chain and make full use of the company’s existing products, production capacity and technical reserves, after scientific and careful market research and analysis, Jiyuan Qingyuan Water Treatment Co., Ltd., a wholly-owned subsidiary of the company (hereinafter referred to as “Qingyuan Water Treatment”), plans to invest in the construction of a project with an annual output of 100000 tons of phosphorus pentachloride, The estimated investment of the project is 308 million yuan, and the construction period of the project is 2 years.
As of December 31, 2020, the total assets of Qingyuan Water treatment were 732 million yuan, the total liabilities were 292 million yuan and the net assets were 440 million yuan; In 2020, the revenue will be 503 million yuan and the net profit will be 23.3776 million yuan.
According to Henan Qingshuiyuan Technology Co.Ltd(300437) , the project is located in the plant area of Jiyuan Qingyuan Water Treatment Co., Ltd., and some utilities can be used. The water, heat, electricity and communication for the construction, production and living of the project can be guaranteed. The living and welfare facilities are complete and the social support conditions are good. The project has no newly acquired land and does not need to demolish any public buildings and residential areas, so there is no resettlement problem. The project construction area has superior natural geographical location, mainly railways and highways, convenient transportation and communication. At the same time, electricity and water can be guaranteed, which provides good construction conditions for achieving the expected project implementation progress. The chemical park where Qingyuan Water treatment, a wholly-owned subsidiary of the company, is located also provides industrial supporting support for the implementation of the project. Therefore, the project construction is feasible.
The performance forecast of 2021 disclosed by the company recently shows that the net profit during the period is expected to be 66 million yuan – 99 million yuan; Deduct non net profit of 38 million yuan – 56 million yuan. In the same period of last year, the company lost 373 million yuan and 378 million yuan in net profit and non net profit respectively.
As for the reasons for the performance turnaround in 2021, Henan Qingshuiyuan Technology Co.Ltd(300437) said that during the period, the production and sales of the company’s main product water treatment agents and derivatives increased compared with the previous period, and the realized main business income and profit increased compared with the previous period; According to the relevant requirements of accounting standards for Business Enterprises No. 8 – asset impairment and accounting regulatory risk tips No. 8 – goodwill impairment, the company expects that the amount of goodwill impairment withdrawn in the current period is about 17 million yuan – 25 million yuan, and the final amount of goodwill impairment provision shall be subject to the audit results of accounting firms.
In addition, the impact of non recurring profits and losses on the company’s net profit in the current period was about 31 million yuan – 37 million yuan, mainly due to the disposal of 50% equity of the subsidiary Anhui Zhongxu Environmental Construction Co., Ltd. during the reporting period, the recognition of investment income and the receipt of various government subsidies, which increased significantly compared with the previous period.
Yanshen industrial chain “docking” lithium hexafluorophosphate
As a basic chemical raw material, phosphorus pentachloride has a wide range of uses. It can be used as a high-efficiency active chlorination agent and catalyst. It is widely used in the fields of medicine, dyes, chemical fiber manufacturing, pesticide synthesis and so on.
It is noteworthy that phosphorus pentachloride is also the raw material for the production of lithium hexafluorophosphate, which is the raw material of lithium battery electrolyte.
Henan Qingshuiyuan Technology Co.Ltd(300437) indicates that the upstream of phosphorus pentachloride is phosphorus trichloride. Qingyuan Water treatment has a production capacity of 160000 tons / year of phosphorus trichloride, which further extends the industrial chain and enhances the product competitiveness of enterprises. After the project is put into operation, it has good market space and can achieve good social and economic benefits.
After 2015, with the rise of the investment concept of new energy vehicles, the price of lithium hexafluorophosphate, as an important part of new energy battery electrolyte, also rose rapidly. However, the accelerated release of industrial capacity at that time made the market supply gradually reach the state of excess around 2016, and the price began to decline from nearly 400000 yuan / ton at the peak to the low point in 2020 by more than 80%.
However, in 2021, driven by the demand explosion of China Shanxi Guoxin Energy Corporation Limited(600617) automobile industry, the price of raw materials upstream of batteries doubled. The price of lithium hexafluorophosphate has also doubled in more than a year from the price of less than 70000 yuan per ton in July 2020 to the bidding price of up to 5.6 million yuan in the market.
Driven by the demand for lithium hexafluorophosphate, relevant Chinese manufacturers successively set foot in and expand production in 2021, and the expansion of market capacity is expected to rise.
In this context, Henan Qingshuiyuan Technology Co.Ltd(300437) believes that the completion of the company’s annual output of 100000 tons of phosphorus pentachloride project will further enrich the company’s product types. At the same time, it is also an important measure for the company to actively explore fine chemical products with strong market demand and high gross profit margin and find new profit growth points, which will help to improve the scientific and technological content of the company’s products and enhance the company’s overall market core competitiveness, It is conducive to the long-term, healthy and sustainable development of the company, make full use of the local advantages, improve the company’s strategic layout and capacity layout, and promote the company to continuously optimize and enhance the market core competitiveness. The company will invest funds by stages according to the project plan. In the short term, the investment and construction of the project will increase the company’s capital expenditure and cash expenditure, but in the long run, if the project can be implemented smoothly, it will have a positive impact on the company’s business layout and operating performance.
