Global Capacity Eliminated &Nbsp; Logic Behind Xinxiang Chemical Fiber Price Soaring

Because of the shutting down of foreign production capacity and the reduction of new domestic capacity in the refrigerant industry, 600636.SH has become a bull in the dust market this year. A similar story may be reproduced on 000949.SZ in Xinxiang.

Recently, China Merchants chemical group believed that Xinxiang chemical fiber products. Viscose filament yarn Prices remain high in the context of the deep down of upstream raw material prices. The logic behind the strong position is that the global stock production capacity has been fully eliminated, and domestic new capacity has been banned in April 2010 and export demand has returned to its highest level in history.

At present, the "golden age" of the profits of Xinxiang chemical fiber products is also reflected in the stock price. Beginning at the end of January this year, a low price of 5.56 yuan started, and the stock went up all the way. Last Wednesday, it hit a high price of 9.45 yuan, with a cumulative increase of 70%.

Product prices skyrocketed

Due to the shutting down of foreign production capacity and the reduction of new domestic production capacity, in January 27th this year, after three yuan Ai Fu hit a low price of 11.78 yuan, it rose fiercely all the way. By May 10th, it had reached 40.5 yuan or 244%.

According to the Montreal protocol, the amount of R22 in developed countries has been reduced by 75%, and the demand for R410a as a substitute has increased significantly. The corresponding raw materials R32 and R125 will also have a high demand. In 2010, the R22 capacity of the developed countries in the world is closed down, and the price rise of R22 will be strong, which will push it to become a R22. Raw material R125 prices continue to rise, R32 and R410a prices will also be driven by its rise, so many domestic chemical enterprises will fully enjoy the feast of product prices.

"At present, Xinxiang chemical fiber with strong share price is mainly viscose filament and viscose staple fiber, and is also based on the same price rise logic." Yin Youjia, chief investment officer of Hui Xiang investment company, told the newspaper. Cotton is down at present, Xinxiang. chemical fiber If we make use of the current replenishment, we will lock down the cost of raw materials, limit the capacity and eliminate the future, and the price of chemical fiber will not fall. Our profits will expand and sustained high growth will be assured.

In a May 5th Research Report, China Merchants Securities chemical group pointed out that the global viscose filament stock capacity was eliminated, and the newly built capacity was banned by the Ministry of industry and commerce. Before 2007, the capacity of overseas closed production was about 40 thousand tons. In 2010, the capacity was reduced by 10 thousand tons. China's production process of viscose filament has been accelerated since 2008, and its capacity has reached 19 thousand tons according to statistics. At present, the global capacity distribution is 200 thousand tons in China and 45 thousand tons in India. The total capacity of the world is about 360 thousand tons. The characteristics of the oligarchs in the industry show that the global supply and demand conflicts are more intense. In view of the new capacity, in April 2010, the Ministry of industry and information technology strictly prohibited the construction of viscose filament yarn project in the "admittance conditions of viscose fiber industry" and implemented it since June 2010. Since then, the industry's new access has been completely sealed off.

"Viscose filament prices remain high in the context of the deep down price of upstream raw materials, which expanded by 4000 yuan / ton in the first quarter. We believe that the logic behind the strong position is that the global stock capacity has been fully eliminated (the capacity of overseas closed production before 2007 is 40 thousand tons, the capacity of the industry has been reduced by 10 thousand tons in 2010, and the domestic closed by 20 thousand tons), and the new domestic capacity has been banned in April 2010, and export demand has returned to its highest level in history. We judge that the pulp price will be offset by viscose staple fiber, and the profitability of viscose filament company will continue to improve. It is estimated that the earnings per share of Xinxiang chemical fiber are 0.56 yuan in 2011, 0.86 yuan in 2012, and the target price is 11 yuan. In a short message to major customers, China Merchants Securities said so.

The logic of cyclical industry

Yin Youjia told this newspaper, for chemical stocks, resource stocks such cyclical stocks, the direct reason for the rise in stock prices is not the increase in profits, but the rise in product prices. As long as the price of the product is upward, the share price also has the power to rise all the way. As to whether the dynamic P / E ratio is too high, it will not directly suppress the stock price. "The cyclical stock and the stock of steady development industry have different logic of speculation. For example, the price of silver has gone up this year, directly pushing up the price of *ST Vida. "

Zhang Bin, an analyst at national gold securities, also believed that Xinxiang chemical fiber was expected to be less volatile in 2011 than in 2010, and began to increase after 2012. Due to the sharp fluctuation in viscose price, the company's performance also fluctuated sharply, but the specific performance expectation was not important, and the main trend was the trend. "In fact, if the product price increases are the mid-term factor of the rise of Xinxiang chemical fiber, then the disclosure of the private placement plan is a short-term catalyst for the rising share price." Yin Youjia told this newspaper.

In February 10th, Xinxiang chemical fiber disclosed the plan for private placement, which is expected to issue not less than 60 million shares, not more than 130 million shares, and raise funds of 600 million yuan. Of which, 500 million yuan for the annual production of 12 thousand tons of continuous polymerization differential spandex fiber project, 100 million yuan to repay bank loans. The base price of the private placement is 5.44 yuan / share.

Investors can note that Xinxiang chemical fiber stocks closed 6.03 yuan before the suspension, at the bottom of the stock price, the official increase is after the disclosure of the plan. Because there is a lock up period of one year's participation in the private placement, we must attract investors to participate in it, so we must have a certain profit margin. A private person who declined to be named in Shenzhen told reporters that the company's viscose filament and the spandex products to be put into operation are in the stage of price rise. Of course, the market parties also have the power to do high share prices together.

A few days ago, the Xinxiang chemical fiber private placement scheme was approved by the Henan SASAC, and the company has gone further from its performance climax.