Zhitong Finance app learned that Guotai Junan released a research report saying that "carbon neutrality" is expected to drive the strengthening of the medium- and long-term substitution effect of ceramic fiber, and the "14th Five-Year Plan" refining and chemical project is about to increase. Luyang Energy Saving (002088.sz) is a domestic ceramic fiber leader, with significant scale advantages and abundant product categories, and is expected to benefit preferentially. It is expected that the EPS for 2021-23 will be 1.46/1.8/2.18 yuan, giving a 21-year target valuation of 35 yuan, corresponding to PE24.2x, covering for the first time, giving an "overweight" rating.
Guotai Junan's main views are as follows:
The company is a ceramic fiber leader, with significant competitive advantages. 1) Scale advantage: the company has an annual production capacity of 360,000 tons of ceramic fiber and 180,000 tons of rock wool, and the domestic market share of ceramic fiber will reach 40% in 2020; 2) Technical advantages: the company's R & D expense rate ranks in the forefront of the industry and rises year by year, the product basically covers all terminal downstream and the proportion of high-end products continues to increase; 3) Leading profitability: After the major shareholder Genesis entered the ownership in 2015, the company's performance has increased year by year, and the profit margin is significantly better than that of comparable refractory enterprises.
In the medium to long term, carbon neutrality is expected to drive the accelerated expansion of ceramic fiber demand. Ceramic fiber is light in weight, high temperature resistance, good thermal stability and small specific heat, which can effectively reduce the energy consumption of the kiln and the construction cost of the kiln: after measuring a 250 * 100w kcal / hour, all the heating furnaces in the medium-sized refinery are converted to ceramic fiber furnace lining, which can save 4700t of fuel per year; The ceramic fiber heating furnace with a heat load of 37.5*100w kcal/h reduces the cost of the lining by 35% and the total cost by 10%. The bank believes that under the general trend of "double carbon", the replacement of ceramic fiber is expected to accelerate.
The "14th Five-Year Plan" large-scale refining and chemical projects are about to increase, and the company is expected to benefit preferentially. The company has significant advantages in the petrochemical field: major new projects account for more than 50%, and major stock projects account for more than 20%. "14th Five-Year Plan" China's large-scale refining and chemical planning capacity of 230 million tons, nearly doubled compared with the "13th Five-Year Plan", the company's core customers "three barrels of oil" and Hengli Petrochemical, Rongsheng Petrochemical and so on as the main investment force. There are customer certification barriers in the petrochemical sector, and the company is expected to benefit preferentially from the scale of large-scale refining projects.
Risk warning: Carbon neutrality is less than expected, petrochemical projects are advancing slowly, and market competition is intensifying.
![002088 Luyang Energy Conservation 2007-2020 Annual Report[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)