Investment advisory support|Yu Xiaoming, editor|Gu Jinfeng
Source: Jufeng Investment Advisory, Good Stock Application
Under the pro-cyclical and high oil prices, chemical prices recovered moderately. Since 2024, the overall economic situation has improved, with macroeconomic indicators recovering significantly year-on-year in the first quarter, and the market's attention to pro-cyclical sectors has increased significantly. Today, let's take a look at the company's investment logic. Pay attention to Jufeng Investment Advisor (jfinfo)/good stock application, and the analysis and research report of the leading target of "Institutional Research and Selection" is waiting for you to get!
The recovery of China's chemical price index (CCPI) index was pushed up by oil prices to a certain extent, but compared with July and September last year, the transmission of midstream chemicals to high oil prices was relatively lagging behind. In 2024, the external environment will remain unstable, oil prices may remain high, and the cost side will have a certain similarity with 2023.
Idea 1: Sub-sectors that benefit from the widening of the price gap between oil and coal and oil and gas. Thinking from the cost side, the difference from last year is that since 2024, the prices of oil, coal, oil and gas have been contrary to each other, the price difference has continued to widen, and the cost advantage of coal and gas head chemicals is even greater than that of the same period last year. We believe that chemical companies that use coal and natural gas as the main raw materials are expected to benefit significantly.
Idea 2: The supply side is limited, and the downstream margin is good. Since 2024, the overall rise and fall of chemical products have been more than less. The chemical varieties with the highest growth are mainly concentrated in sub-sectors with limited supply, such as refrigerants that will enter the quota period in 2024, filament yarns that tend to stabilize the pattern, and TMAs that have withdrawn from overseas production capacity. Whether it is from the perspective of product price or stock price, the current market supply-side logic dominates, and the supply-side limited chemical varieties are more elastic. Judging from the high-frequency data, the production schedule of white electricity such as air conditioners, the operating rate of tires, and the operating rate of the weaving industry are significantly better than the same period in previous years, and related upstream chemicals may fully benefit.
Idea 3: Potential high-dividend targets. There are some commonalities of high-dividend targets: 1) Upstream companies with low costs and profitable advantages. 2) Sub-sectors that have passed the peak of capital expenditure and have a relatively stable industry pattern. Many companies in sub-sectors such as amino acids, fertilizers, and dyes have such characteristics, and there may be room to increase dividend yields in the future.
Today, let's take a look at the company's investment highlights with a leading brand in the recycling chemical fiber industry.
1. The company's fiber masterbatch output continues to rank first in China.
2. Revenue and profit growth. The total revenue increased by 51.18% year-on-year, and the net profit attributable to the parent company increased by 112.16%.
3. Relying on the core R&D team, the company has formed a basic technology with formula design, color matching technology, functional modification, and trial production evaluation as the core in long-term innovation and accumulation.
Brief introduction and main business of Polydy
Polydi takes R&D and innovation as the continuous driving force for development, and has been committed to technological innovation in the field of chemical fiber stock solution coloring and functional modification. As a high-tech enterprise in Jiangsu Province, the company has 12 core technologies, 10 invention patents and 34 utility model patents.
In 2016, the company and China Textile Research Institute and other units jointly undertook the research and development of the "13th Five-Year Plan" national "key basic material technology improvement and industrialization" project - "development and application of high-quality dope dyed fibers"; in 2017, the company won the title of "National Chemical Fiber Industry Application Innovation Enterprise"; in 2018, the company was jointly recognized by the China Chemical Fiber Association and the National Textile Chemical Fiber Product Development Center, and the company set up a national fiber functional masterbatch research and development base, laying a solid foundation for continuous innovation in the future. As a member of China Chemical Fiber Association, the company actively participates in the drafting and formulation of industry standards by using its technical advantages and production experience in the field of fiber masterbatch and even green fiber.
As of the signing date of the prospectus, the company participated in the drafting of chemical fiber industry standards including "recycled flame retardant polyester staple fiber (FZ/T52026-2012)", "green procurement specification for recycled chemical fiber (polyester) industry (T/CCFA00006-2016)", "technical requirements for green fiber evaluation (T/CCFA02007-2018)", and the fiber masterbatch industry standard being drafted is "fiber grade polyester (PET) masterbatch ( Program No. 2018-2169T-FZ)".
The concept of the ownership of Polydy stocks
Specialized, special and new, Jiangsu plate, plastic products, energy conservation and environmental protection, institutional heavy position, pre-profit and pre-increase, margin financing and securities lending, and GEM comprehensive
What are the domestic peer companies of Polydy?
Demei Chemical, Zhejiang Longsheng, Runtu Shares, Yayun Shares, Jinji Shares, Jianxin Shares, Jihua Group, Anoqi, Yabang Shares, Baolidi, Flaeant, Shanshui Technology, Wanfeng Shares, etc.
What is the basic situation of the issuance of Polydi's shares?
The total share capital of Polydy shares is 176 million shares, of which 117 million A shares are outstanding. As of April 23, the total market capitalization was 4.633 billion, the circulating market value was 3.087 billion yuan, and the price-earnings ratio was 46.57. The number of shareholders is 13,400. The largest shareholder is Xu Wenda, with the top ten shareholders accounting for 63.95% of the shares.
The financial growth is significant
According to the 2023 annual report, Baolidi's total revenue was 1.197 billion yuan, with a year-on-year increase of 51.18%, and the net profit attributable to the parent company was 99.4878 million yuan, an increase of 112.16%.
Business conditions
The 2023 annual report shows that the masterbatch is 1.142 billion yuan, accounting for 95.37%. The color paste was 13.4149 million yuan, accounting for 1.12%.
Investment Highlights:
Point 1: Covalent Organic Framework Materials (COFs)
The company and Professor Zhang Zhenjie (hereinafter referred to as "Zhang Zhenjie") jointly funded the establishment of a joint venture company on new materials such as covalent organic framework materials (COFs). On June 8, 2023, the company announced that the joint venture, Yaoke New Materials (Suzhou) Co., Ltd., has completed the industrial and commercial registration procedures and obtained the business license issued by the Administrative Examination and Approval Bureau of Xiangcheng District, Suzhou City. Covalent organic framework materials (COFs) can be widely used in gas separation and storage (such as hydrogen storage), catalysis, sensing, biomedicine, optoelectronic materials, environmental protection and energy due to their high thermochemical stability, good biocompatibility, large specific surface area and porosity, controllable chemical and physical properties, low backbone density, permanently open pore structure and diversified synthesis strategies. At present, Yaoke has successfully synthesized a series of new COFs material products, realized the small-scale and pilot tests of COFs and other new materials, and is actively industrializing the practice.
Point 2: Market position
Since its establishment, the company has been committed to becoming the leader and promoter of "dope coloring technology". The company now has five production bases in Suzhou, Jiangsu, Siyang, Jiangxi, Jiujiang, Jiangxi, Xiamen, Fujian, and Turkey, and the company is actively merging and appointing Xiamen Luyi Color Masterbatch Co., Ltd., and the company's overseas Turkish production base is expected to be officially put into use in the first half of 2023. In 2022, the company's annual sales volume will reach 54,200 tons, which is in a leading position in the industry. According to relevant statistics, in recent years, the company's fiber masterbatch output has continued to rank first in China.
Point 3: Overseas layout
Gaziantep, where Polydy's Turkish factory is located, is one of the centers of Turkey's carpet industry, and in recent years, Turkey's polyester chemical fiber industry has developed rapidly and has become the third largest market after China and India. After in-depth market research and certification, in August 2021, the company established a subsidiary in Gaziantep, Turkey. After unremitting efforts, in May this year, Polydy Turkey factory officially started production. After the Turkish factory is put into operation, it will focus on the company's overseas market business, and its main business is the production, R&D and sales of masterbatches, which will help the company seize the international market and improve the company's profitability.
Point 4: R&D and innovation
The company takes the Polydi Research Institute as a platform, and the Polydi Research Institute continuously attracts master's and doctoral students to work around the positioning requirements of the postdoctoral workstation in Jiangsu Province, and the postdoctoral workstation under the jurisdiction of the Polydi Research Institute has been rated as a national postdoctoral workstation, and there are about 50 high-tech talents and engineers in various special projects of the Institute. Relying on the core R&D team, the company has formed a basic technology with formula design, color matching technology, functional modification, and trial production evaluation as the core in long-term innovation and accumulation. The advantages of basic technology are difficult to replicate, which are bred in the R&D environment of long-term accumulation and innovation, and have the characteristics of long research cycle and high development cost. The development and formation of basic technology requires advanced concepts, scientific processes, and stable teams. The company's innovative products may be simply imitated by other companies, but the innovation ability and technical system behind it are difficult to imitate, as long as customer needs change, it is difficult for imitators to adapt. With advanced basic technology, the company can quickly respond to the different needs of customers.
Who is the chairman of Polydy?
Bao Lidi is Mr. Xu Yiming, chairman, Chinese nationality, no right of permanent residence abroad, engineer, senior economist. From July 1987 to October 1992, he served as a technician in the chemical fiber workshop of Suzhou Jiangnan Silk Factory; From October 1992 to May 1995, he served as the chief of the technical section of Wuxi Changhong Chemical Plastic Granule Factory; From May 1995 to December 1995, he served as the director of Wuxian Kangda Fiber Masterbatch Factory; From December 1995 to December 2002, he served as the director of Suzhou Kangda Fiber Masterbatch Factory; From December 2002 to May 2018, he successively served as the chairman and general manager, executive director and manager of Baoli Plastics; Since November 2002, he has successively served as executive director, manager and supervisor of Juxingbao; Since May 2008, he has served as a supervisor of Baolidi (Suqian) Material Technology Co., Ltd.; Since August 2017, he has been the executive partner of Europium Halcyon; Since May 2018, he has served as the chairman of Baolidi for a term of three years. Mr. Xu Yiming is currently a member of the 4th CPPCC of Xiangcheng District, Suzhou City, and was awarded the 2018 National Outstanding Textile Entrepreneur by the China National Textile and Apparel Council in December 2018, the 2016-2017 Outstanding Private Entrepreneur of Suzhou City by the Suzhou Municipal Committee of the Communist Party of China and the Suzhou Municipal People's Government in May 2018, and the Model Worker of Xiangcheng District of Suzhou City by the Xiangcheng District Committee of the Communist Party of China and the Xiangcheng District Government of Suzhou City in April 2019.
Enlightenment Today:
You're not buying stocks, you're buying a part of the business. - Warren Buffett
Reference Sources:
CICC-Chemicals: The main line of chemical investment in a pro-cyclical, high-oil price environment - 20240422
Western Securities-Chemical Industry Weekly View: Middle East conflict may affect supply chain, focus on pro-cyclical resource products - 20240422
(Investment advisory support: Yu Xiaoming, practicing certificate: A0680622030012)
Disclaimer: The above content is for reference only and does not constitute specific operation advice, and you shall operate at your own risk and profit and loss