Is There Any Speculation About The Price Of Dyes? Many Companies Respond Urgently.

In April 5th, Yancheng City, Jiangsu decided to completely close the Xiangshui Chemical Industrial Park. At the same time, according to the provincial chemical industry upgrading plan, we should further raise the standards of chemical industry parks and chemical enterprises in our city, and support the construction of "no chemical district" in all regions.

In the evening of April 7th, a number of listed companies announced that the closure of Xiangshui Chemical Industrial Park had an impact on the company's performance.

Combined with the recent announcement, Jiangsu Wuzhong and Lianhua technology will be greatly affected, while the listed companies such as the Asian group, Kyrgyzstan group, colorful chemical and anothem are relatively less damaged due to the relatively low damage and less business with Tian Jia Yi.

A number of companies responded by announcements.

Jiangsu Wuzhong: or the total amount of goodwill of Xiangshui Hengli will result in a loss of performance in 2018.

On the night of April 7th, Jiangsu announced that the Hengli Da, a wholly owned subsidiary of Xiangshui chemical industry park in Xiangshui, was temporarily out of production. Due to the fact that there is no formal relevant treatment plan and measures concerning the complete closure of Xiangshui Chemical Industrial Park, there is a big uncertainty in how to deal with it.

Affected by this, there may be a large amount of goodwill arising from the acquisition of 100% stake in Xiangshui Hengli da.

If the total amount is calculated, it will lead to the loss of the company's performance in 2018 (there is still uncertainty).

Xiangshui Hengli Da was founded in July 21, 2010 with a registered capital of 413 million yuan. Its business scope is organic pigment and disperse dyestuff production and sales.

Historical announcement shows that Xiangshui Hengli DA has been repeatedly dragged down by the park.

In May 2018, Jiangsu Wuzhong announced that Xiangshui Hengli reached a temporary shutdown according to the requirements of the relevant government departments on all chemical enterprises in the park and all the chemical enterprises in the park.

In December 29, 2018, the announcement of Wu Zhong in Jiangsu received the notice from the local government that Xiangshui Hengli would resume production gradually from December 29th.

After preliminary calculation, the temporary suspension of production resulted in a total loss of about 40 million yuan in Hengli, Xiangshui in 2018.

This directly dragged down the performance of listed companies.

Jiangsu Wuzhong disclosed the 2018 performance forecast in January 31st. It is estimated that the net profit attributable to shareholders of Listed Companies in 2018 will be 42 million yuan to 72 million yuan, a decrease of 61 million 110 thousand yuan to 91 million 110 thousand yuan compared with the previous year, a decrease of 46% to 68% over the previous year.

The decline of Xiangshui Hengli's performance also triggered the risk of goodwill impairment. At that time, Jiangsu's central bank conducted a preliminary impairment test on the goodwill arising from the acquisition of 100% stake in Xiangshui Hengli. The reporting period is about 75 million yuan to 105 million yuan in the preparation of goodwill impairment, which will reduce the company's annual net profit.

However, less than 4 months after the resumption of production, it encountered a "3.21" catastrophe. It is expected that the performance of listed companies will be further affected.

Lianhua Technology: no relevant documents have yet been received, and communication with relevant government departments will be maintained.

Lianhua technology said on the interactive platform in the evening of April 7th, as of now, the company and its subsidiary Jiangsu Lianhua and Yancheng Lianhua have not yet received relevant government documents, and how to deal with the greater uncertainty later, the company will maintain communication with relevant government departments.

The company said that if the Xiangshui Chemical Industrial Park was completely shut down, the company would organize and discuss specific directional decisions on the integration of Jiangsu and Yancheng.

At the same time, the company will make use of the advantages of multi regional production and linkage at home and abroad, so as to reduce and resolve all kinds of risks that may be faced.

At present, the company is still in the stage of insurance claim settlement, and the current situation is in line with the insurance company's risk standard. The insurance company and the public appraisal company have arrived at the scene to start the settlement of claims for damages, and the cycle may take several months.

According to historical announcements, two important subsidiaries of Lianhua science and technology are located in the park, and the performance of both companies has a greater impact on the overall performance of listed companies, and is expected to be affected by this closed garden.

The March 23rd announcement of Lianhua technology shows that Jiangsu Lianhua and Yancheng Lianhua are important subsidiaries of the company. The total operating income in 2017 was 1 billion 810 million yuan, and the total net profit was 120 million yuan, accounting for 44.12% and 57.85% of the company's consolidated statements respectively.

Affected by the blast wave, 2 employees died and the rest of the staff were injured. Some of the housing facilities of Jiangsu Lianhua and Yancheng Lianhua were damaged. At present, Jiangsu Lianhua and Yancheng Lianhua are temporarily out of production.

New products: the actual production of the park's subsidiaries has no significant impact on 2019's performance.

In the evening of April 7th, the Tong Cheng new material announced that the company holding subsidiary is located in the chemical industrial park and is in the project construction period. It is not actually started, and is affected by the explosion shock wave, the Tongcheng is refined without casualties and the building is slightly damaged.

The subsidiary is a new acquisition company for Tongcheng. Up to now, the company's follow-up investment is about 29 million 60 thousand yuan.

Asia Bond: current business activities are not affected.

In April 7th, the announcement of the company's shares showed that the company's Chemical Industrial Park in gungou Town, Lianyungang, was 10 kilometers away from the Chen Jia Gang Chemical Industrial Park. The infrastructure of each sub branch and branch office of the chemical industry park was damaged to varying degrees, causing no casualties.

The company's current business activities are not affected. The companies that have not yet resumed production are carrying out production and rectification work step by step. It is not clear whether the explosion will affect the progress of the resumption of production.

Kyrgyzstan group: does not have a significant impact on the normal production and sales of the company.

Kyrgyzstan group announcement shows that the Jiangsu branch of the wholly owned subsidiary, Ji Hua, is not located in the ecological Chemical Industrial Park of the Xiang Shui county. The area of Jiangsu Jihua is about 25 km away from Tian Jiayi chemical industry. The major accident did not cause casualties and equipment damage in Jiangsu Jihua.

At present, the company's top ten customers and suppliers are not located in Xiangshui eco chemical park. Tian Jiayi chemical company is one of the suppliers of some products of the company. Because of its relatively small proportion, the major accident will not have a significant impact on the normal production and sales of the company.

Colourful chemistry: it does not affect the operation of the company.

In March 22nd, the seven color chemistry issued a Clarification Announcement. All the important intermediates of the company are self-produced. The company's wholly owned subsidiary, Dongying Tian Zheng Chemical Co., Ltd. and colorful chemical production ensure that the production of the main products of the company will not be affected by external suppliers.

The company set up supplier evaluation system. For non self produced intermediates, multiple suppliers must be purchased.

In 2015, Tian Jiayi was one of the top five suppliers of the company. In 2016, the proportion of total purchases in -2018 decreased, which would not affect the operation of the company.

Anochi: it has no significant impact on the company's production and operation in 2019.

Anso announced in March 23rd that Jiangsu anto is a wholly owned subsidiary of the company, located in the ecological Chemical Industrial Park of the Xiang Shui county, 2.2 km away from Tian Jiayi chemical industry.

Jiangsu Anor is temporarily out of production.

Because its net profit accounts for a smaller percentage of the net profit of the company's consolidated statements, the temporary shutdown of Jiangsu anoits will not have a significant impact on the company's production and operation in 2019.

Industry concentration will accelerate

XinDa Securities believes that Jiangsu is a major province in China's chemical industry, especially pesticide, dyestuff and petrochemical production. The number of chemical enterprises is the first in China, and there are more than 4500 Chemical Enterprises above designated size. Therefore, the "3? 21" accident will become a turning point in the development of China's chemical industry, and will have a profound and long-term impact on China's chemical industry.

Founder Securities believes that the closure of the Xiangshui Chemical Industrial Park will have a far-reaching impact on the chemical industry, which may lead to a demonstration role. It is not ruled out that more chemical parks will be shut down in the future. The closure of existing enterprises in the park may result in a shortage of supply of related industries, resulting in higher prices and pmission to the terminal.

The chemical industry will produce larger supply contraction, which will urge the existing enterprises to pay more attention to safety and environmental protection, but it will also pose a threat to the supply chain safety of the industrial chain.

In addition, industry concentration will accelerate in the longer term.

Chemical leading enterprises in chemical industrial parks, which are more standardized in safety and environmental protection, and will continue to expand their capacity in the future, will have higher premium power, and the entire chemical industry market share will be accelerated.

Guosheng Securities believes that a new round of inspections with "safety production" as the theme will be launched in the near future. The chemical industry will usher in a new round of supply side contraction.

At present, the selection criteria are as follows: they are the leading industry, environmental protection and safety do well, their parks are not affected, the future expansion will not be affected; the industrial chain is complete, and the core raw materials and intermediates can self support; the impact of sub industries and upstream intermediates will be large and lasting for a long time; the concentration of sub industries is high, leading enterprises have absolute right to speak, have strong bargaining power on the downstream, price elasticity is large, and the downstream is not sensitive to price rise.