China Xinmin Technology Rises 3.23%: Pformation Into Chemical Fiber Producer

(002127) the latest increase is 3.23%, and it is reported to be RMB 14.40 yuan.

Will benefit from

Tension, short line resistance to see the brin line (temporarily $15.30).

The company announced on Monday that last year, the company made 62.71% of its total revenue from polyester filament business, and this year, the construction of polyester filament project with private placement is expected to increase further next year. According to the relevant regulations, the company's industry classification will be changed from the textile industry to the chemical fiber industry.

Analysts in Shanghai believe that when the supply of cotton is tight, the polyester filament industry is expected to maintain a high level of prosperity. After the pformation of the company's business, the differential rate of products will increase and the capacity expansion will be clear. The material will benefit from the high popularity of the polyester industry. The company expects earnings per share of 0.37 yuan this year to maintain a buy rating and a target price of 18.40 yuan, because its valuation is the lowest among chemical fiber stocks.

Supplement:

Event: Xinmin Technology (002127) issued a notice, approved by the company, and approved by the Shenzhen stock exchange. The company will formally start the new industry classification from November 1, 2010. The industry category will be changed from the original "C11 textile industry" to "C47 chemical fiber manufacturing industry".

We believe that in the current main business of Xinmin technology, the polyester filament business both accounts for more than 60% of the total income in terms of gross income or gross profit, and the company's non public offering project is a polyester filament project. After the project was completed in 2011, according to our estimate, the total income of the polyester filament business will account for more than 80% of the company's total revenue. The industry category is adjusted from "textile" to "chemical fiber", which reflects the fact that the main business of the company is pformed from fabric to polyester filament.

Xinmin technology, formerly a manufacturer of silk fabrics, has 48 years of experience in silk production. It has long been in the top ten of China's silk industry. The company has a profound understanding of the development trend of silk and textile industry. The pformation of business into polyester filament is the key to the future development of the company.

Investment suggestion: under the condition of tight supply of cotton, the polyester filament industry is expected to maintain high prosperity, the demand for polyester filament is strong, and the capacity expansion of the industry is limited by the supply of equipment. After the successful pformation of Xinmin technology into polyester filament, the product differential rate is high, and the future expansion of production will be clear, which will fully benefit the prosperity of the polyester industry.

We expect the company's 2010-2011 years EPS to be 0.37 yuan and 0.92 yuan respectively, and dynamic PE are 37 times and 15 times respectively. In 2011, dynamic PE is the lowest among the A share listed companies in the polyester industry. The company value is still underestimated by the market. We continue to recommend the company as the first choice to invest in the polyester industry.