Haohua Technology (600378) March 2019 Commentary: Some Product Prices Fall, Pressure on Performance, and Long-term Development
Event: On October 28, Haohua Technology released 3 quarterly results: the company achieved operating income of 33 from January to September.
3 billion, +13 a year.
00%, realizing net profit attributable to mother 3.
3 ‰, at least -1.
86%, net profit after deduction 3
16 trillion, +769 a year.
Among them, the company achieved operating income of 1051 million US dollars in the third quarter, a year of +3.
96%, achieving net profit attributable to the parent company of 7,269.
97 thousand yuan, at least -22.
12%, net profit after deduction 6685.
3.8 billion, previously +470.
12%, performance was slightly lower than market expectations.
According to the operating data disclosed by the company, from January to September, the company’s main products are: 1) Fluorine materials segment: PTFE resin price4.
92 million / ton, -22 per second.
95%; 2) Electronic special gas plate: nitrogen trifluoride.
39 million / ton, ten years -5.
7%; 3) Special rubber products plate: rubber seal products 14.
69 million / 10,000 pieces, +15 for ten years.
14%; new polyurethane material 1.
85 million / ton, ten years -17.
06%; 4) Fine chemicals plate: palladium catalyst 29.
38 million / ton, ten years -43.
26%, copper-based and nickel-based catalysts 6.
95 million / ton, +5 for ten years.
52%, special coating 3.
85 million / ton, +24 per second.
In general, the prices of fluorine materials and electronic special gas products fell, affecting the company’s profits, while the prices of specialty rubber products and fine chemicals products rose.
Investment Highlights: The injection of high-tech assets has been completed, and the performance of leading new materials has grown steadily.
On December 26, 2018, the company completed the acquisition of 11 science and technology enterprises of China Haohua, and gradually built the technology-driven new material leader of China Chemical Industry.
Trading consideration 63.
2.7 billion, of which 11.
08 yuan / share issue 5.
400 million shares, cash payment of 5 yuan, after the completion of the acquisition, Haohua Group held 72 shares.
4%, the actual controller is China National Chemical Corporation.
The company has five major sectors of fluorine materials, special gases, special rubber and plastic products, fine chemicals and technical services. The products serve 5G, aerospace, military and other national strategic industries.
In 2018, the company achieved operating income of 41.8.2 billion, ten years +14.
7%, achieving net profit attributable to the parent company 5.
2.5 billion every year 61.
05%; In the first half of 2019, the company realized operating income22.
79 trillion, ten years +17.
73%, achieving net profit attributable to the parent company2.
57 trillion, +5 for ten years.
Fluorine materials: supporting the production of 5G cables, polytetrafluoroethylene (PTFE) to achieve import substitution.
The company’s fluorine materials business mainly comes from Chenguang Academy. Its products include polytetrafluoroethylene resin (PTFE), new fluorine rubber (raw rubber) and fluorine compound rubber, tetrafluoropropanol, perfluoro nylon, tetrafluoroethylene monomer, etc.A wide range of electronic communications, aerospace, petrochemical, automotive, textile and other fields.
Among them, the self-developed high compression ratio polytetrafluoroethylene dispersion resin products have successfully supported the production of 5G cables, which are exclusive in China and achieve import substitution; developed second-generation low-creep polytetrafluoroethylene suspension resins and other high-end fluoropolymer materials, Local blank.
At present, the production capacity of fluorine rubber of Chenguangyuan and joint ventures has reached 7,000 tons / year, the first in China; the production capacity of fluorine resins has reached 2.
2Every year / domestic, second in China; supporting intermediates such as difluoromonochloromethane, tetrafluoroethylene, hexafluorophenyl, etc., and some products have the highest domestic production capacity.
Special gases: technical barriers to nitrogen trifluoride and sulfur hexafluoride are high.
The company’s products are mainly fluorinated electronic gases (including nitrogen trifluoride, sulfur hexafluoride, etc.), green dinitrogen tetroxide, high-purity hydrogen selenide, high-purity hydrogen sulfide, etc., a wide range of semiconductors, power equipment manufacturing, LEDs,Fiber optic cables, solar photovoltaic, medical health, environmental monitoring and other fields.
The 2,000-ton / year nitrogen trifluoride project co-constructed by the company and Daesung of South Korea has widely used semiconductor production processes such as etching, cleaning, and ion implantation; the subsidiary Limingyuan is also the only high-purity sulfur hexafluoride production unit in China. Customers include electricityEquipment manufacturing companies and BOE and other panel companies.
In addition, other special gases are also used in the national defense aerospace industry, and some products have been replaced by imports.
Industrial grade sulfur hexafluoride domestic cities account for approximately 30%, electronic grade sulfur hexafluoride domestic cities account for approximately 70%, nitrogen trifluoride city accounts for approximately 30%.
Special rubber products: significant advantages in large aircraft and military markets.
The special rubber and plastic products business includes rubber sealing products, special tires, aerospace plexiglass and new polyurethane materials. The company has undertaken the R & D and production of C919, ARJ21, CR929 and other aircraft sealing profiles, and has important production of Chinese military aviation tires.The base is an aviation tire fixed-point development enterprise of the Air Force, Hainan Airlines and Army Aviation. The research and development of aviation radial tire technology break through foreign occupation. At the same time, the company is an important domestic aviation plexiglass development enterprise, and its products are widely used in military aviation.
Fine chemicals: breakthrough in technological strength, multiple products supporting military use.
Products cover special coatings, catalysts, chemical propellants and raw materials.
The company’s main special coating products include marine coatings, aerospace special functional coatings, industrial heavy-duty anticorrosive coatings, etc. The customers cover military and civilian products.
In the field of catalysts, the company has strong technical strength. Its main products include: nickel-based catalysts (gas conversion), copper-based 西安耍耍网 catalysts (methanol synthesis), and newly developed fuel cell catalysts.
In the field of chemical propellants, the company’s subsidiary Liming Yuan specializes in liquid propellant products and solid propellant raw materials. A variety of liquid propellants widely use missiles, torpedoes, fighters and other weapons and equipment, as well as Shenzhou series spacecraft, Chang’e moon exploration project, TiangongyiSpace Station and other key engineering projects.
At the same time, the company has developed a variety of solid propellant raw materials. Among the various strategic and tactical weapon models for decades, many of them are major domestic manufacturers.
Expansion of investment projects to create new profit growth points.
The company plans to raise no more than 10 specific investors to no more than 10.
苏州桑拿网9 trillion, of which 5.
3 billion M & A deals, while the remaining 5.
6 million US dollars investment project construction, including: 1.
Chenguangyuan 5000t / year high quality polytetrafluoroethylene suspension resin and supporting projects (planned investment 1).
1.9 billion); 2.
2. Guangming Institute R & D industrial base project (special gas, investment 100 million yuan)
Liming Dacheng 1000t / year electronic-grade nitrogen trifluoride expansion project (investment 1).
4.2 billion); 4.
Haihua Institute Advanced Coatings Production Base Project (investment 89.6 million yuan).
After the completion of the project, it is expected to bring new profit growth points.
Earnings forecast and investment rating: Maintain “Buy” rating.
The company has breakthrough technology strength, high quality assets, and broad market space in many fields such as downstream 5G, aerospace, and military industries.We are optimistic about the company’s long-term development. Based on the principle of prudence, we will not consider the impact of targeted issuance on the company’s performance and equity. It is expected that the company’s EPS for 2019-2021 will be 0.
75 and 0.
81 yuan / share, corresponding to PE of 23.
65 and 19.
Maintain “Buy” rating.
Risk reminder: Lower-than-expected demand for downstream 5G, semiconductors, military industries, etc., product prices decline, safety and environmental protection production risks, and the uncertainty of the company’s targeted additional issuance.