In the first quarter of this year, the net profit of Listed Companies in the field of silicone generally achieved positive growth.
According to the financial report data, listed companies in the silicone industry Ningbo Runhe High-Tech Materials Co.Ltd(300727) ( Ningbo Runhe High-Tech Materials Co.Ltd(300727) . SZ), Jiangxi Chen Guang New Materials Co.Ltd(605399) ( Jiangxi Chen Guang New Materials Co.Ltd(605399) . SH) and Hoshine Silicon Industry Co.Ltd(603260) ( Hoshine Silicon Industry Co.Ltd(603260) . SH) achieved net profits of 25.56 million yuan, 190 million yuan and 6.390 billion yuan respectively in the first quarter, with year-on-year increases of 23.41%, 203.04% and 92.57% respectively.
As the silicone market continues to be hot, enterprises have expanded their production one after another. On May 10, Ningbo Runhe High-Tech Materials Co.Ltd(300727) announced that it planned to issue convertible bonds to raise 292 million yuan, mainly for the deep processing of organic silicon and other fields. Moreover, Jiangxi Chen Guang New Materials Co.Ltd(605399) and Hoshine Silicon Industry Co.Ltd(603260) and other enterprises have plans to expand their production this year.
“The price of silicone will continue to increase this year, mainly due to the boost of global chemical product market demand after the impact of covid-19 pneumonia, the recovery of industry demand and China’s’ double control ‘policy. The price of silicone will generally rise. However, due to the expansion of downstream production capacity, the supply will keep up with the demand, so the increase will not be too large.” In an interview with China business daily, Hong Qianjin, a researcher of Sinopharm Puhua, said that at present, there will be no overcapacity when enterprises expand a large number of silicone projects, because the per capita GDP of emerging market countries is low, and the per capita silicone consumption still has a big gap and growth prospects compared with developed countries. Therefore, the market demand space of emerging market countries is large, which is conducive to China’s Silicone export and balance production capacity.
The reporter learned from Ningbo Runhe High-Tech Materials Co.Ltd(300727) that in the past two years, the focus of the global manufacturing industry has continued to shift to China. Due to the strong export of terminal downstream products and the continuous expansion of application scenarios in new markets, the demand has been growing; In addition, silicone is still in the process of concentration to large and medium-sized production enterprises. At the same time, in the international market, the imbalance between supply and demand in the global shipping market has rapidly changed from oversupply to short supply. Europe, America and Southeast Asian countries continue to increase their dependence on the import of Chinese silicone products. The favorable export and rising prices of Chinese companies have led to a significant increase in overseas sales and a significant increase in the profitability of the industry.
Hot market
Silicone is a kind of new high-performance chemical materials with various forms, varieties, excellent performance and wide applications. Its industrial chain is divided into four links: silicone raw materials, silicone monomers, silicone intermediates and silicone deep-processing products.
In the past decade, the global production capacity of silicone has been transferred to China obviously. China has become a large country of silicone production and consumption. The advantages of Chinese silicone products are becoming more and more prominent, and the import substitution effect is significant.
According to the statistics of sagsi, as of 2018, there were 13 methyl monomer manufacturers in China (including Dow Wacker Zhangjiagang plant). The total capacity of polysiloxane is 1415000 tons / year (1307000 tons / year in production), and the output is 1.13 million tons, with a year-on-year increase of 2.83% and 10.68% respectively. The average annual compound growth rate from 2008 to 2018 is 19.41% and 19.21% respectively. The industry is developing rapidly.
In fact, the rapid development of silicone industry can also be seen from the performance of listed companies.
On April 27, the performance report of 2021 released by the leading silicon-based materials company Hoshine Silicon Industry Co.Ltd(603260) showed that during the reporting period, the company achieved an operating revenue of 21.343 billion yuan, a year-on-year increase of 137.99%; The net profit attributable to the parent company was 8.212 billion yuan, a year-on-year increase of 484.74%, and the performance reached a record high. In addition, Hoshine Silicon Industry Co.Ltd(603260) 2022 achieved an operating revenue of 6.390 billion yuan in the first quarter, a year-on-year increase of 92.57%, a net profit attributable to the parent company of 2.051 billion yuan, a year-on-year increase of 124.74%, and a net profit attributable to the parent company of 2.048 billion yuan after deduction, a year-on-year increase of 125.30%.
On April 26, Ningbo Runhe High-Tech Materials Co.Ltd(300727) released a performance announcement for the first quarter of 2022, which showed that its revenue was about 306 million yuan, an increase of 21.27% year-on-year; The net profit was about 25.56 million yuan, a year-on-year increase of 23.41%. In addition, Jiangxi Chen Guang New Materials Co.Ltd(605399) disclosed that the revenue in the first quarter of 2022 was 532 million yuan, an increase of 98.63% year-on-year; The net profit attributable to the parent company was 190 million yuan, a year-on-year increase of 203.04%; Deduction of non net profit was 188 million yuan, with a year-on-year increase of 228.04%.
A number of enterprises said that the performance growth was mainly due to the growth of sales volume and average selling price of silicone products.
Hong Qianjin told reporters that the price of silicone will continue to increase this year, mainly due to the impact of covid-19 pneumonia on the global chemical product market demand, the recovery of industry demand and China’s “double control” policy. The price of silicone has generally increased. However, due to the expansion of downstream production capacity, the supply will keep up with the demand, so the increase will not be too large.
He said that in the second half of this year, silicone will continue to have a high outlook, mainly because silicone shows its superior performance and plays a role in more and more broad fields. At the same time, with the development of the national economy and the continuous improvement of people’s living standards, silicone products will play their advantages in more and more fields, gradually realize the substitution of traditional materials and expand the scope of application, The downstream demand scale will continue to grow.
continuous production expansion
In fact, in recent years, the state has continuously issued relevant policies to encourage the development of silicone industry.
In January 2021, the national development and Reform Commission and the Ministry of Commerce issued the catalogue of industries encouraging foreign investment (2020 Edition), which included “development and production of new silicone downstream products”, “R & D and production of fluorosilicone organic materials”, “silicone rubber” and “adhesives and sealants” into the “catalogue of industries encouraging foreign investment throughout the country”.
On December 30, 2021, the national development and Reform Commission issued the decision on Revising the Guiding Catalogue for industrial structure adjustment (2019 version). The guidance catalogue will “new silicone monomers such as phenylchlorosilane and vinyl chlorosilane, phenyl silicone oil, amino silicone oil and polyether modified silicone oil, high-performance silicone rubber and hybrid materials such as phenyl silicone rubber and phenylene silicone rubber, high-performance resins such as methylphenyl silicone resin, triethoxysilane and other series of efficient coupling agents” and “Comprehensive utilization of carbon tetrachloride, silicon tetrachloride, methyltrichlorosilane, trimethylchlorosilane and other by-products, capture and application of carbon dioxide” is listed in the “encouraged category”.
In this context, silicone related projects have sprung up one after another.
The reporter noted that in 2021, Hoshine Silicon Industry Co.Ltd(603260) invested 4.4 billion yuan in organic silicon for the project of annual output of 200000 tons of siloxane and downstream deep processing, which was completed and put into trial production in the first quarter of 2022. Meanwhile, Hoshine Silicon Industry Co.Ltd(603260) plans to invest 3.5 billion yuan in the project of annual output of 200000 tons of siloxane and downstream deep processing, which is expected to be put into operation in the fourth quarter of 2022.
Hoshine Silicon Industry Co.Ltd(603260) believes that the company’s simultaneous expansion of industrial silicon and silicone production capacity is expected to give full play to the advantages of industrial chain integration and strengthen the leading position in the industry.
Meanwhile, Jiangxi Chen Guang New Materials Co.Ltd(605399) also completed the construction of the second phase of the “60000 ton / year organic silane coupling agent project” in 2021, passed the project acceptance and operated normally at the end of 2021. After the completion of the project, the production capacity of sulfur-containing silane, methacryloyloxysilane and diaminosilane was added. In addition, it also raised and invested in the “technical transformation and capacity expansion project of new silicone materials with an annual output of 65000 tons”.
Jiangxi Chen Guang New Materials Co.Ltd(605399) said that in 2021, the company has completed the equipment installation and construction of KH-560 and allyl glycidyl ether production lines, which can be applied for trial production and accepted. Normal production can be carried out after relevant procedures are completed; The production lines of kh-540, V4, cg-794, cg-605 and other products of the raised investment project are still under construction and installation, and are advancing in an orderly manner. In 2021, the company will build a new special silicone material project with an annual output of 23000 tons, which is expected to be completed in two years.
In addition, Shandong Dongyue Organosilicon Materials Co.Ltd(300821) ( Shandong Dongyue Organosilicon Materials Co.Ltd(300821) . SZ) 300000 t / a silicone monomer unit has successfully produced qualified silicone ring products on January 31, 2022, and has basically reached normal production status at present Shandong Dongyue Organosilicon Materials Co.Ltd(300821) said that the follow-up company would promote the trial production of 200000 t / a deep processing device for silicone downstream products.
According to the data of Zhongyan Puhua, the output of silicone monomers in China continued to expand from 2013 to 2015. In 2016, affected by environmental protection inspectors, the output of silicone monomers decreased. From 2017 to 2020, the output of silicone monomer rebounded, and the output of silicone monomer in 2020 was 2.36 million tons.
According to the information of China fluorosilicone organic materials industry association, with the continuous expansion of China’s silicone monomer production capacity, the improvement of technical level and the increasingly fierce market competition of silicone monomer and silicone intermediate, foreign companies have basically abandoned the new silicone monomer production plant and focused on the development of silicone deep-processing products with high technical content and high added value; Construction, textile and household appliances industries are the traditional application fields of silicone deep-processing products, accounting for about half of the total consumption of siloxane. They will still be the main application fields of silicone materials for a long time in the future, and will still maintain a certain growth rate.
Hong Qianjin believes that at present, there will be no overcapacity when enterprises expand a large number of silicone projects, because the per capita GDP of emerging market countries is low, and there is still a large gap and growth prospect between per capita silicone consumption and developed countries. Therefore, there is a large market demand space in emerging market countries, which is conducive to China’s Silicone export and balancing production capacity.
Hong Qianjin said that at present, China’s shortage of goods still exists in the short term. With the gradual recovery of the market, the production scale of downstream enterprises shows a steady upward trend, and the peak season of silicone industry chain has come. At present, the price of silicone has risen to a high level, and the pre-sale orders of monomer factories are well arranged. The price of silicone in the future may continue to fluctuate upward.
In fact, China’s leading companies have also been expanding their overseas markets in recent years. Taking Ningbo Runhe High-Tech Materials Co.Ltd(300727) as an example, from 2019 to 2021, the overseas sales amount of Runhe materials was 842937 million yuan, 113 million yuan and 246 million yuan respectively; Overseas sales accounted for 13.36%, 15.84% and 22.30% of operating revenue respectively.
