\u3000\u3 China Vanke Co.Ltd(000002) 068 Jiangxi Black Cat Carbon Black Inc.Ltd(002068) )
Recommendation logic
Lead the production of carbon black and optimize the internal governance of the company. The company is a leading enterprise in the carbon black industry, with the largest capacity in China. The eight carbon black production bases have a total carbon black capacity of 1.1 million tons, and 160000 tons will be added in the future. In recent years, the company has optimized the existing internal management system through the reform of state-owned enterprises, implemented employee equity incentive, optimized production costs, improved cost control and improved profitability.
Grasp the opportunity of new energy, focus on the layout of conductive agent products, and optimize the company’s existing product structure. The company has been investing heavily in R & D for many years, has a good research foundation in the field of carbon based materials, and deeply develops special carbon black products. The increasing demand for new energy has led to a significant increase in the demand for conductive agents. In 2021, the shipment of conductive agents for lithium batteries in China was 13200 tons, with a year-on-year increase of 29%. The company seized the opportunity to layout a series of lithium conductive electric carbon black products, meet the multi-level product demand of downstream while accelerating domestic substitution, accelerate product customer certification and large volume, and expand the layout of carbon nanotube products and expand the types of conductive agents, Lithium conductive carbon black is expected to contribute more than 15% of the profits in 2023.
With its own advantages, it extends the layout of fine chemical industry and helps the company improve its development space. Relying on its foundation in the coal tar industry chain and the advantages of comprehensive utilization of multi base energy, the company has arranged Jining base (holding 35%) and Wuhai base (holding 35%) with Anhui Shilian to arrange a series of products such as m-cresol and resorcinol. In the future, the company will further use the advantages of phenolic products and tire customer base to arrange tire auxiliary products; At the same time, the company and Lianchuang jointly arranged a 50000 ton PVDF project, with the company holding 20%, which is also expected to benefit from the rapid increase of downstream demand. Through the participation and layout of fine chemical products in many fields, it is expected that the profit contribution of fine chemical products in the company will exceed 10% and 30% in 23 and 24 years.
The profit of traditional carbon black products was affected by export demand, and the profit of products increased slightly. More than 80% of the downstream carbon black is used in the rubber field and nearly 70% in the tire field. The product profit fluctuates with the demand of the downstream tire field. This year, affected by the overseas energy supply and the conflict between Russia and Ukraine, there is an obvious supply gap in Europe. In March alone, China’s export of carbon black to Europe has reached more than 10000 tons, less than 4000 tons compared with the whole year of 2021, which has achieved a significant increase. Driven by the export demand and relatively low supply of carbon black, the profitability of carbon black has obviously warmed up since March.
Investment advice
Traditional carbon black’s profit recovery driven by export is still the company’s core performance contribution business this year. Lithium conductance carbon black is expected to contribute to the performance in the fourth quarter and increase in volume in the whole year of 23. Fine chemical products will make a significant performance contribution in 23 years, and the investment income is expected to exceed 100 million yuan. It is predicted that the company’s net profit attributable to the parent company from 2022 to 2024 will be 438 million yuan, 538 million yuan and 777 million yuan, and EPS will be 0.59, 0.72 and 1.04 yuan respectively, Give the company a 21 times PE valuation in 2022, with a target price of 12.31 yuan and a “buy” rating.
Risk tips
Carbon black fluctuates periodically, the breakthrough speed of conductive agent customers does not meet the expectations, and the construction of new projects does not meet the expected risks.
