Nanjing Chemical Fiber: Product Price Increases

1. incident

In November 5th, Viscose staple fiber Prices are rare in history. Price inflation 。

2. our analysis and judgement

(1) the continuous increase of export tax rebate, downstream recovery, cotton price rise and elimination of backward production capacity resulted in a four increase in viscose fiber prices.

The continuous increase of export tax rebate, the recovery of downstream, the rise of cotton prices and the elimination of backward production capacity resulted in a substantial increase in the price of viscose fiber in four major factors. First, since 2008, the export rebate rate of viscose fiber has increased 3 times, increased to 14% in November 1, 2008, increased to 15% in February 1, 2009, and increased to 16% in April 1st, which played a great role in improving the export situation of viscose fiber. Viscose staple fiber exports increased faster than the month, 6~10 months, 5 months, the monthly export volume of more than 10 thousand tons, close to the 2007 level. Second, the downstream market demand has been restored. In the 1~11 month of 2009, the textile industry actually completed 34268 billion yuan of industrial output value, an increase of 9.7%; the main business revenue was 32961 billion yuan, an increase of 10.54%; the total profit was 133 billion 100 million yuan, an increase of 25.39%. Most of the 9 varieties of downstream chemical fiber production increased, and the growth rate of chemical fiber yarns and non-woven fabrics increased to two digits. Third, because of the strong substitution relationship between chemical fiber staple and cotton, the increase and high operation of cotton prices will increase the willingness of the downstream to increase the use of chemical fiber staple fiber. Due to the further reduction of cotton production, it is estimated that China's cotton output will be 31 million 500 thousand packages (6 million 860 thousand tons) this year, the forecast value will be reduced by 3.08% from last month, and the final inventory is expected to be 17 million 40 thousand tons, which is 2.85% lower than the forecast figure in October. The price of viscose fiber has risen sharply, driven by the strong cotton price. Fourth, Chemical fiber industry The speed of elimination was obviously accelerated.

In 2009, one of the highlights of the chemical fiber industry is that it has done a good job in eliminating backward areas and eliminated 1 million 372 thousand tons of backward production capacity. It is the largest and most serious year for eliminating the backwardness. For example, Jiangsu Sheng Hong Group eliminated 100 thousand tons of intermittent polymerization and 100 thousand tons of continuous polymerization energy production respectively, and decided to develop PTT fiber in the next few years according to the differences between domestic and foreign market demand. As one of the leading enterprises in the viscose industry, Jiangsu Australia Industrial Co., Ltd. closed 45 thousand tons of Zhangjiagang viscose staple fiber production capacity and so on.

(two), the chemical fiber industry in 2011 is promising, and the price of viscose fiber is still rising. The space chemical fiber industry has recovered before other industries. In 2011, the chemical fiber industry was optimistic, and the price of viscose fiber still had room for improvement. First of all, from the macroeconomic environment, the world economy has seen a marked recovery signal, and the Chinese economy will continue to recover in 2011 on the basis of a speedy recovery in 2010. Against this background, China's textile industry is accelerating the pace of recovery, and the most obvious is that exports have been showing positive growth. Secondly, the central economic work conference has brought confidence to the development of the chemical fiber industry, and the national policies to deal with the crisis have strong stability and continuity, which laid the foundation for the recovery of the chemical fiber industry. Third, the quality of China's chemical fiber industry now accounts for 76% of the total capacity. In recent years, these high quality production facilities are still undergoing technological spanformation, and there is much room for a new level. In addition, the crisis has not only weakened but promoted the status of China's chemical fiber industry in the global industry. This is the result of the struggle of Chinese chemical fiber workers and the symbol of the maturity of the chemical fiber industry. Fourth, the China Chemical Fiber Association is more confident in the industry's assurance and service, especially in the field of operation and development of industry. It has been actively evaluated by the relevant departments of the state and recognized by the vast number of enterprises.

(three), the company relocation and spanformation project is basically completed, and the production capacity is improving. When the first phase of the June 2009 project of viscose filament removal and spanformation project was put into trial production in 5000 tons / year, the 30000 tons of viscose staple fiber production and spanformation project in December 2009 began trial production. The 30 thousand tons / year differential short fiber two phase project has basically completed and has entered the production stage. Recently, the price of viscose staple fiber has seen a history of soaring prices. From the low of 17100 yuan / tonne in mid August this year, it has risen to 26400 yuan / ton, or 54.4%. In addition, the first phase of Le Ju Ya garden developed by Nanjing Jinling Real Estate Development Co., Ltd., which is holding 70% of the company, has already been completed, and will soon enter the sales stage, which will also greatly increase the company's profits.

3. the investment suggestion is that the price of viscose fiber has increased sharply due to the continuous improvement of export tax rebate, the recovery of downstream, the rise of cotton prices and the elimination of backward production capacity. In 2011, the chemical fiber industry was optimistic, and the price of viscose fiber still had room for improvement. The relocation and renovation project of the company was basically completed. When the production capacity was raised, the Jinling real estate project in Nanjing was added to the icing on the cake. We expect the company's 10-12 year performance to be 0.22 yuan, 0.68 yuan and 0.83 yuan. Corresponding to the current stock price PE is 37.76 times, 12.02 times and 9.61 times, give the recommended investment rating.