\u3000\u3000 Shanxi Tond Chemical Co.Ltd(002360) (002360)
The company is not only the leader of civil explosives in Shanxi Province, but also one of the few industrial explosive production enterprises with complete types in China. Since its listing, the company has continuously improved the production capacity of industrial explosives through endogenous growth and acquisition. At present, the production capacity has reached 106000 tons. In 2021, the company started the "second venture" and announced the construction of 60000 tons of PBAT and 240000 tons of BDO projects, which has entered a new chapter of development.
Shanxi is the leader of civil explosion, with significant competitive advantage in the region. Due to the special properties of flammable and explosive products, the civil explosive industry has the characteristics of high entry barriers, limited product transportation distance and state support for M & A. these characteristics determine that the civil explosive industry will form a regional leader. Through industry M & A integration, its development speed will be significantly faster than the average growth rate of the industry, and its competitive advantage is expected to be continuously maintained and strengthened. The company is the leader of civil explosion in Shanxi Province, accounting for about 20% of the city in the province in 2020. In addition to the scale advantage, the company also has the following two advantages: (1) significant location advantage. The headquarters of the company is located in Hequ County in the northwest of Shanxi, which is the junction of Shanxi, Shaanxi and Inner Mongolia. There are major coal producing areas in China, and bauxite and iron ore resources are also very rich. The development of the above resources has a large demand for civil explosives. (2) High degree of industrial chain integration. The company runs through the whole links of R & D, production, sales, distribution, blasting and trade of the civil blasting industry chain. Tongde blasting, a wholly-owned subsidiary, has the qualification of first-class blasting operation unit license and a complete set of high-end blasting equipment issued by Shanxi Provincial Public Security Department, and can provide all-round services from preliminary survey to the completion of final blasting.
In 2020, the national development and Reform Commission and the Ministry of ecological environment issued the opinions on further strengthening plastic pollution control. The scope and strength of the "plastic restriction order" were significantly expanded, and degradable plastics ushered in a period of rapid development. We predict that the replacement space of degradable plastics will be about 3.74 million tons by 2025. Assuming that China's PBAT (including PBS) accounts for 65% of degradable plastics, China's PBAT market space will be about 2.43 million tons in 2025, with 18 times the growth space in five years. However, due to the low production barriers, the substantially increased market demand has also attracted many enterprises to expand their production. In the second half of 2021, the price of raw material BDO increased significantly, while the price of PBAT increased slightly, and the profit has been greatly compressed.
Relatively speaking, we are more optimistic about the BDO industry. We estimate that driven by downstream such as spandex and PBAT, BDO demand will increase from 1.65 million tons in 2021 to 3.28 million tons in 2025, with a four-year compound growth rate of 19%. At the same time, the existing and under construction BDO production capacity is still dominated by calcium carbide alkynaldehyde method. However, calcium carbide production consumes a lot of power and has CO2 emissions. Under the background of carbon neutralization, the expansion of production is limited. The new calcium carbide project can only be replaced by the same amount, and the expansion space is small. In 2021, BDO price and profit reached a record high, and the operating rate of the industry increased significantly. We estimate that BDO supply is still tight in 2022 and 2023. The company is close to the main producing areas of main raw materials calcium carbide and methanol, and has been put into operation earlier in the new production capacity. It is expected to fully benefit from the high prospect of the industry in 2023.
We predict that the company's net profit attributable to the parent company in 2021 / 22 / 23 will be 154 / 168 / 449 million yuan, eps0.1% 39 / 0.43/1.15 yuan, corresponding to the current price of pe23 71 / 21.71/8.11x. Give 13 times PE in 2023, consider additional issuance and dilution, and the target price is 11.9 yuan. For the first time, it will be rated as "overweight".
Risk tip: the demand of civil explosive industry is declining; The progress of BDO and PBAT projects is less than expected; The prices of calcium carbide, BDO and PBAT fluctuated sharply
