Category: Money tips Release Date: 2006-08-11
BDO field in the core competitive advantages is the only one in Shanxi 3D BDO calcium carbide production enterprise (due to technical barriers, the future is impossible to have a second home), in the context of high oil prices, the company a competitive advantage is very obvious, Currently, BDO gross margin levels as high as 50%.
07,08 Annual growth explicitly in July 2006 a new 45,000 tons BDO project in 2007 mid-term 200,000 tons crude benzene refining project will be put into operation early in 2008 the company BDO new 75,000 tons will be put into operation. These will support the company's annual results for 2007,2008 rapid growth.
The company's performance and rating in 2006 we expect earnings per share was 0.40 yuan, 2007,2008-year diluted earnings per share were 0.53 yuan and 0.85 yuan. 2007 dynamic price-earnings ratio of 17 times, below the level of fine chemical industry average price-earnings ratio to give the rating.
PVA (polyvinyl alcohol) business more stable PVA13 manufacturing companies in China since its founding, is basically not much change in industry output growth came from in the renovation and expansion of these enterprises, there is no new entrants. Currently, PVA industry has entered a mature stage, the industry organization structure is stable, competitive situation and profitability is also relatively stable.
Under normal circumstances, the level of the industry gross profit margin maintained at 10-16% or so.
Shanxi Province last year, built a three-dimensional two production lines, with production capacity 2 million tons, the company total capacity to 10 million tons, of which one was put into operation late last year, another one is debugging. In 2005, PVA production of 641 million tons, expected in 2006 will increase about 10%.
Most of the international PVA devices downstream products of ethylene - vinyl acetate as a feedstock, so PVA great influence on prices as crude oil prices, while China's electricity stone PVA devices downstream products - vinyl acetate as a feedstock, in the current calcium carbide to price stability circumstances, my PVA production to benefit from the PVA prices. Shanxi Province used for three-dimensional vinyl acetate, their method can only solve half of the power stone (due to the company acetate ethylene processing capacity of only 6 million tons), the other half need to outsource, so although prices have strengthened this year's PVA, but little effect on the performance of the company .
BDO Business: competitive advantages are obvious Inc. BDO (1,4 - butanediol) using calcium carbide process route, is the world's only set of BDO calcium carbide devices, and only three-dimensional control of this process in Shanxi's core technology, the global is not This second device may occur. Because of this process the lowest cost route (we expect the cost of Shanxi, three-dimensional lower than the other devices 1000 yuan / ton or more), so the field of Shanxi, three-dimensional in the BDO a clear competitive advantage.
At present, the world's BDO capacity of 200 million tons, of which BASF share of global capacity by 25%. From the process route of view, there are n-butane method, maleic anhydride method, acetylene-formaldehyde method, butadiene method, propylene oxide, etc., each company production processes with different features, but the raw materials are derived mostly from natural gas, and petrochemical products, and only Shanxi, three-dimensional use of calcium carbide acetylene as a feedstock, crude oil prices rising in the case of Shanxi, three-dimensional competitive advantage has been fully embodied. Of course, if oil prices gradually lower, this advantage will continue to shrink.
Most of the world's BDO capacity BASF, Dupont and other multinational companies to do to be controlled, so BDO's pricing is also controlled by the hands of these transnational corporations. As the materials used by these companies are not natural gas, that is, petrochemical products, they are bound to push crude oil prices BDO prices.
At present, China's BDO demand of 15 million tons, relatively large gap, import dependence has reached 60-70%, this situation has attracted Sichuan is China, Xinjiang, and other enterprises to join the United States grams. But no matter how BDO expansion are hard to shake the competitive advantage of Shanxi, three-dimensional and profitability, because only three-dimensional grasp of Shanxi BDO calcium carbide process line, to do with gas and petrochemical raw materials, high cost of domestic BDO enterprises can not be with them competition.
Shanxi 3D BDO products of good quality products in short supply, profitability is very high (up to 50% gross margin level), in 2005 the company BDO production of 3.1 million tons, the company consumes PTMEG production of 18.9 thousand tons of which the actual export of the BDO is only 1.19 million tons. BDO profitability due to higher than PTMEG, so essential in ensuring the supply of customer premise, the company will adjust production of BDO and PTMEG ratio, while maintaining optimal profitability. With the company's new projects put into production, BDO and THF and PTMEG sales will be increased, but not the same as the rate of increase.
Company's new 45,000 tons of BDO device was put into operation in July 2006. 8000 the company plans to issue additional shares to raise funds directed a new 75,000 tons BDO project is expected early 2008.
BDO high prices will remain for some time recently, the situation in the international oil prices, BDO prices deviated from the trend showed the emergence of the rally, mainly because there are two aspects:
1, BASF price increases. Recently, BASF announced that from January 1, 2007 to begin to raise prices of American products BDO, or under contract, BASF will address the United States, Canada and Mexico, where pairs of BDO, THF, PTMEG, poly tetramethylene ether 2 alcohol, GBL, and NMP to price increases, price increases range from 0.06 U.S. dollars / pound, equivalent to 1050 yuan / ton. It is understood that, despite the recent drop in oil prices, BASF in North America, the cost of installation has not declined. 2, the downstream industry better. Recently, the downstream spandex squall prices rose, increasing the demand for PTMEG.
3, BASF Shanghai device failure. BASF in Shanghai, 80,000 tons THF / 6 Wan Dun PTMEG integration of devices, in the last year, THF unit is leaking, coupled with inadequate supply of raw materials, butane, has announced the permanent closure of THF device. This, BASF increased the amount of BDO outsourcing, resulting in eastern China have been relatively tight supply of BDO.
In theory, the fall in oil prices will sooner or later be reflected in the price of BDO up, but BASF Shanghai devices, such effects may be delayed for some time.
200,000 tons of refined crude benzene project is expected by mid-2007 production 200,000 tons of refined project uses crude benzene hydrogenation process, the introduction of German technology, product quality and yield of pickling technology than domestic general good. The project is expected in mid-2007 production. At present, the benzene price of 9700-9800 yuan / ton, while the crude benzene prices in the 5000-5500 yuan / ton, gross margin is expected to reach 20%.
Three-dimensional surrounded by a lot of Shanxi coke enterprises, crude benzene resources more abundant. If a transportation project to do well, then in 2008, the company may be at two works, two works will include 80,000 tons of maleic anhydride (further can be prepared BDO), 3.3 Wan Dun BDO, 2.5 Wan Dun THF and 10,000 tons GBL . Note that the crude benzene refining project, if construction of too many will result in refined crude benzene and narrow the spread between benzene, the project's profitability could be reduced.
Performance Forecast: 07,08 years of guaranteed performance growth in 2007, company performance growth will mainly come from the 45,000 tons of items up to BDO production, and crude benzene refining the project put into production.
In 2008, the company's growth will mainly come from the 75,000 tons BDO project's start-up projects, and crude benzene refining capacity.
Domestic equipment income tax credit. Corporation income tax credit the amount of domestic equipment 5,000 million divided into 5-year credit in 2006, has credits in 1992 million, is expected in 2007 can also credits 1500-2000 million.
The additional year will be diluted earnings per share 07,08. August 16, 2006 shareholders of the General Assembly adopted the company's additional motion, decided to issue 8,000 million shares, issuing price of not less than 5.84 yuan / share. We expect the first half of 2007 is expected to implement additional programs. After the implementation of additional programs, 2007,2008-year earnings per share will be diluted accordingly.
Investment rating At present, the company's share price 917 yuan in 2007 price-earnings ratio of 17.30 times more dynamic, slightly lower than the industry average price-earnings ratio may be appropriate to buy.
