Huafeng Spandex: Comprehensive Advantages Of Spandex Highlight Diversified Development

< p > > a > recently < /a > Huafeng spandex. It has communicated with the management of the company about the spandex business development plan, the development trend of the industry, and other business development situations. The core points are as follows: in the first half of the year, the spandex industry is running smoothly, and there is still much room for development in the future. In 2013, the spandex industry benefited from rapid growth in demand (more than 20%) and less domestic production capacity. Since the beginning of 2014, the spandex industry has been running smoothly, the fine denier yarn market is better, the market price has remained stable, and the price of 40D has been slightly weakened. At the same time, due to tight funds, the downstream link inventory is relatively small. Taking into account the traditional peak season of 40D and coarse denim in the second half of the year, demand is expected to pick up again, which is expected to drive prices up. < /p >
< p > in the long run, the future demand growth of the spandex industry is expected to remain at 7~10%. With the promotion of high-grade and elastic fabric demand, and the extension of spandex applications in the sanitary and industrial fields, there is still room for development. From the supply side perspective, the competitive advantage of large enterprises in cost control, technological strength, energy saving and emission reduction is becoming increasingly prominent, and the future supply pattern is expected to concentrate on large enterprises. In 2014, the main new capacity of the spandex industry in China, including Fujian Heng Shen 1-2 million tons, Taihe new material 0.8-1 million tons and Huafeng spandex 30 thousand tons, is expected to be put into operation in the fourth quarter of this year. Therefore, the supply increment of spandex in 2014 is estimated to be only more than 10 thousand tons, and the above mentioned production capacity in 2015 is expected to be gradually digested by growing demand. < /p >
< p > Huafeng spandex has outstanding competitive advantages. The main development strategy of spandex is to make strong spandex main industry. Huafeng spandex has the comprehensive competitive advantage in the domestic spandex industry, such as product quality leading, cost control ability, technology research and development system improvement, energy saving and emission reduction technology leading, and management ability. From the perspective of product structure and scale, the company's main competitor is Korea Xiao Xing. Although Xiao Xing has certain advantages in some differentiated varieties, the cost of the company is about 5% lower than that of Xiao Xing, and is generally lower than that of other domestic production enterprises, depending on new equipment, low energy consumption (technical transformation), and centralized procurement of raw materials. According to our preliminary estimate, the company's single ton profit is about 1000-2000 yuan higher than that of the industry. < /p >
< p > > a > Future < /a > Huafeng spandex will continue to make bigger and stronger spandex business as the company's primary strategy. The construction of the Chongqing base has been progressing steadily. The first phase of the 30 thousand tons project will be put in place gradually and will enter the installation stage. It is expected to be put into trial production in October. The two phase 30 thousand tons are being planned, and it is expected to be put into operation after 2015. The Chongqing base enjoys preferential policies, and the land, infrastructure investment and labor costs are relatively low. After preliminary calculation by the company, the average cost of running the new capacity at full capacity is expected to be 4000-5000 yuan / tonnes lower than the existing capacity of the company. After the production capacity is put into operation, the cost advantage of the company is expected to further expand, and the output capacity of Chongqing in the outer market is 70%. The market demand and profitability will also be better than the conventional products. In addition, Huafeng spandex will continue to promote the public utilities matching, additives research and development, product differentiation and other aspects, and the competitive advantage of the spandex main industry will continue to strengthen. < /p >
< p > appropriately promoting diversified development has become a long-term potential growth point. On the basis of strengthening the main business, the company has also been promoting diversified development in recent years. The Liaoyang benzene deep processing project has entered the later stage of construction and is expected to be completed and completed in August. The project made full use of the advantages of abundant benzene resources and signed a long-term supply agreement with Huntsman. After the commissioning, the sales and profits were guaranteed. The operation experience of the project is also expected to provide the possibility and necessary preparation for the extension of the future industrial chain to the downstream polyamide. The polyurethane solidification track bed project was led by the Railway Construction Research Institute of the Chinese Academy of Railway Sciences, and was cooperated with the Shanghai Huafeng new material R & D Technology Co., Ltd., Huafeng spandex as the raw material supplier for the project. The project product has been successfully developed and completed the first test. Although the follow-up test, national standard establishment and application promotion still need time, the market space of the project is large, and it is expected to open wider space for the long-term development of the company. < /p >
< p > < a href= > http://sjfzxm.com/news/index_cj.as > > /a >, the company also has some reserves in the application and development of other new materials. The promotion of these projects is expected to become a long-term potential growth point of the company. < /p >
< p > maintain "overweight" rating. Huafeng spandex is one of the leading enterprises of spandex in China. At the same time, it expands its business to new material field through diversified development of related industries. The company's core competitive advantages include: 1) the spandex main industry has the comprehensive advantages of large production scale, strong cost control ability, energy saving and emission reduction advantages, and the global profitability of the products. The subsequent Chongqing project will help the company further reduce production costs, enhance product differentiation and competitiveness. 2) the company has the advantages of coordinated development with the group business in the new material field. The huabeng group, the controlling shareholder of the company, has a profound foundation for development in the field of polyurethane materials. The follow-up of the Huafeng spandex will be synergistic with the group business in the new material projects such as solidified ballast bed, which will help them open up new growth space in the new material field. < /p >
< p > 2014, the supply of spandex in China is limited and the demand is growing steadily. The prosperity of the industry is expected to maintain well, which is conducive to the sustained growth of the company's performance. The Huafeng spandex Liaoyang benzene deep processing project is expected to be put into operation in the second half of the year, which will provide a new profit increment. The solidified ballast bed project will promote the company to develop new polyurethane materials, and is expected to open wider development space for the company. We expect the company's 2014~2016 EPS to be 0.65, 0.86 and 1.03 yuan respectively, so as to maintain the investment rating of "overweight". < /p >
< p > risk hint: the downstream demand of spandex is lower than the expected risk; diversification projects progresses below the expected risk. < /p >