Jiangsu Thorpe (600746): Major asset reorganization meets after the king of acetic acid industry returns
Through major asset reorganization, the Group’s overall listing was achieved. Thorpe Group has a capacity of 120 tons of acetic acid (another 20 tons are temporarily suspended), and it also supports 30 tons of ethylene glycol to generate electricity.”Coal chemical industry chain”, the scale of acetic acid ranks first in the country, the scale advantage is outstanding, and it has international competitiveness.
The main business of Jiangsu Suopu Company is ADC foaming agent production. The profitability is not optimistic. The company actively promotes the overall listing of the group. On November 4, 2019, the company’s major asset reorganization passed the review of the Securities Regulatory Commission and was conditionally approved.
Acetic acid industry: The demand has increased, and the production capacity has not increased. The industry has entered the boom cycle. The supply side: The period of rapid growth of production capacity has passed. In the future, the capacity will be replaced.
The acetic acid industry has high barriers to entry, and new capacity is limited in the future.
1) Barriers to capital expenditure: The scale of investment in acetic acid production equipment and the construction period are extended. The investment required for a 50-ton capacity is about 3 billion, and a full new capacity requires a construction period of 2-3 years.
2) Technical barriers: Acetic acid has certain reliability, and the device needs continuous maintenance. The accumulation of continuous operating experience will help manufacturers to stabilize and reduce production.
There are not many new production capacity planned in the future, and there is no large-scale replenishment in 1-2 years.
Demand side: The continued strong downstream demand has given strong support to the price of acetic acid.
1) The increase of new PTA production capacity will directly increase the demand for acetic acid in the short term. It is expected that the PTA plant to be launched in the next two years will drive about 90 tons of acetic acid.
2) The import of EVA resin may be imperative. Increasing production capacity will continue to increase the demand for ethylene in the downstream industry of acetic acid. It is planned to increase the production capacity of 190 tons of EVA in the next 5 years, corresponding to the demand of acetic acid of about 250,000 tons.
3) About 15 new calcium carbonates are added to vinyl acetate, which theoretically can increase the demand for acetic acid by about 9.
4) In the long run, the country has launched an ethanol fuel promotion plan, divided by the existing domestic fuel ethanol capacity of more than 2 million, and replaced by more than 200 additional capacity under construction. A conservative estimate is that there is still a gap of 600 orders of magnitude.The potential of the industry will also provide some support for the price of acetic acid.
Investment suggestion After the major asset reorganization is successfully completed, Jiangsu 北京养生会所 Thorpe will have the largest domestic acetic acid production capacity of 120 tons, accounting for 14% of the country’s total production capacity; covering a complete industrial chain from methanol production to acetic acid production, with obvious scale advantages and industry ownershipLowest cost curve with core competitiveness.
At the same time, Thorpe is strategically located close to the main consumption area of acetic acid, and has a complete set of industrial park facilities, which has unlimited future development.
In this transaction plan, the company’s profit forecast is based on the price of acetic acid at 2,600 yuan, and we believe that the actual price of acetic acid this year will far exceed 2,600 yuan.
If this major asset reorganization is successfully completed, it is expected that the company will realize net profit attributable to mothers in 2019 and 2020, respectively.
53 billion, 7.
710,000 yuan, corresponding to EPS 0.
62 yuan, 0.
74 yuan, corresponding to PE 12 times, 12 times; give “overweight” rating.