Wenzhou Synthetic Leather Is Forced To Produce Capacity Or Usher In Industry Development.

< p > over the past few years, the output of synthetic leather has increased rapidly in China.

The lower reaches of the synthetic leather are mainly a href= "http://www.91se91.com/news/index_c.asp" > shoemaking < /a > furniture, bags and other industries. In 2010, these three sectors accounted for about 39%, 21%, 14% of the total consumption of synthetic leather respectively, accounting for 74% of the total consumption of synthetic leather in China. By the growth of downstream demand and international industrial pfer, the output of synthetic leather in China increased from 410 thousand tons to 3 million 140 thousand tons in 2000-2012 years, and the compound growth rate reached 18.5%, and the growth rate increased rapidly.

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< p > synthetic leather industry is a fully competitive industry, with capacity mainly concentrated in Zhejiang and Fujian.

The synthetic leather industry has relatively low capital and technical barriers, so the industry is relatively competitive. At present, there are about more than 500 synthetic leather enterprises above Designated Size, and a large number of small and medium-sized enterprises. The distribution of domestic synthetic leather enterprises is relatively strong, mainly distributed in Zhejiang, Fujian and other places. In 2012, Zhejiang, Fujian and Jiangsu accounted for 75% of the total output of synthetic leather in three places.

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< p > a href= "http://www.91se91.com/news/index_c.asp" > synthetic leather industry < /a > is a weak cycle industry, and the profit growth rate is expected to rise in 2014.

Due to the fluctuation of downstream demand and upstream raw material prices, the synthetic leather industry showed a weak cyclical nature. In the 2009-2010 years, the income and profit growth rate of the synthetic leather industry went up, and the income and profit growth rate of the synthetic leather industry increased downward in the 2011-2012 years. The industry growth in the first three quarters of 2013 has been restored. Under the background of the low price of raw materials and the macroeconomic recovery, we expect that the synthetic leather industry will increase its profit growth rate in 2014.

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< p > January 2013, < a href= "http://www.91se91.com/news/index_p.asp" > Wenzhou < /a > the municipal government issued the synthetic leather industry renovation plan. It plans to reduce the production capacity of Wenzhou synthetic leather by 30% and 50% respectively in 2014 and 2015. At present, the production capacity of Wenzhou synthetic leather accounts for about 30% of the domestic synthetic leather production. We have analyzed that if the production line is shut down on schedule, the supply and demand structure of the industry will be better.

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< p > general situation of listed companies.

At present, A shares include Amway shares, Hua Fengchao fiber, Tong Da shares, wo Xin shares and dual elephant shares, 5 synthetic leather listed companies.

Amway's products and development orientation are located in eco functional PU leather. Currently, it is the largest domestic synthetic leather listed company. Its sales volume is second in the domestic market. Huafeng fiber and the same big stock focus on the ultra fiber PU leather. In the past few years, Hua Fengchao fiber production capacity has expanded rapidly. Now it is the largest super fiber leather company in the country. The wo Xin shares and dual elephants share in the sewage treatment and the PMMA glass business besides the synthetic leather business.

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< p > profit forecast and investment suggestion.

We maintain the industry's "overweight" rating.

On the company side, we expect Amway shares to earn 0.33, 0.42 and 0.54 yuan per share for 2013-2015 years. We maintain the company's "overweight" investment rating, 6 yuan target price 11.80 yuan, corresponding to 28 times dynamic price earnings ratio in 2014. We expect the Huafeng super fiber 2013-2015 company EPS to be 0.58, 0.83 and 1.06 yuan respectively, maintaining the company's "buy" investment rating, the target price of 1.06 months is RMB yuan, corresponding to the 2014 dynamic PE.

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< p > risk disclosure.

(1) industry competition intensifies risk; (2) raw material price fluctuation risk; (3) macroeconomic risk.

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