Expert Analysis: The Value Of The Xinxiang Chemical Fiber Concept Stock

Company introduction

Xinxiang chemical fiber company was founded in 1960, is China's production of chemical fiber

The largest state-owned enterprise is one of the 520 key enterprises in the country and one of the 30 key enterprises in Henan.

The company has the right to import and export independently.

The leading product viscose rayon production capacity ranks first in Asia.

Viscose rayon and viscose staple fiber won the title of "China famous brand product".

Main points

The new capacity of spandex in 2015 will boost the company's performance.

The company's annual production of 2*2 million tons of super soft spandex fiber project is continuous polymerization dry spinning technology, which can steadily produce ultra-fine denier spandex fiber less than 20D. The comprehensive cost is low, and energy consumption is reduced by 34% compared with the third generation technology.

From the price point of view,

40D market price 49000 yuan / ton, 20D spandex price 59000 yuan / ton.

The first phase of the spandex project launched by the company mainly produces 20D spandex, which accounts for about 60%-70%. The remaining production of 40D can also produce less than 20D products, but this part of the demand is small, mainly depending on the order.

Therefore, we believe that the commissioning of spandex project is not only an expansion of the company's business, but the profit margin of spandex 20D is at least 10 percentage points higher than that of 40D. Therefore, the role of the new project is to optimize the product mix and enhance the core competitiveness of the company in the industry.

We assume that in 2015, 70% of spandex was added to 20 thousand tons of spandex, and 30% was spandex 40D, the thickening company's earnings per share were 0.06 yuan. 40D

Viscose filament production capacity is the largest in China, and its profit is stable but there is no expansion plan.

Unlike viscose staple fibers, viscose filament prices are cyclical, but the fluctuation range is small. The average price in 2014 is expected to decline by 0.54%, resulting in a 7.57% decline in the company's revenue. However, the price of cotton pulp and wood pulp is also declining, resulting in a reduction in the cost of filament yarn by 5 percentage points over the previous year.

The company's scale is the first in China, its quality is good, its sales are better, and its contribution to the company's performance is stable at around 0.24 yuan.

Viscose staple fiber is basically not profitable, at the bottom of the industry cycle.

At present, viscose staple fiber is running normally, almost full production, and customers are relatively stable.

But the market price is 11650 yuan / ton, a new low since 2011. At the end of the year, the stock market is on the rise. Therefore, the viscose staple market in the next 3-6 months is still in the doldrums.

Performance prediction and sensitivity analysis: according to the information disclosed by the market, our Forecast Ltd 2014~2016 EPS was 0.11, 0.35 and 0.41 yuan / share respectively.

The company's Viscose business is stable, and future performance elasticity comes mainly from spandex business.

Under other assumptions, we calculate that the EPS of the spandex will increase by 0.01 yuan for every 500 yuan per ton of comprehensive cost, and the annual output of spandex will increase by 1 thousand tons per ton, and the EPS of the company will increase by 0.01 yuan.

Expert evaluation:

Maintain the investment rating of "overweight".

Business expansion can optimize the industrial structure and enhance profitability. At the same time, the company also has cotton pulp production capacity, which can better control the volatility risk of raw materials.

Risk warning: product prices fall sharply, and project construction is hindered.