Huafeng Spandex Expects Net Profit Growth To Exceed 10% In The First Half Of The Year, And 60 Thousand Tons Of Production Capacity Will Lead A New Round Of Growth.

The Zhejiang Huafeng spandex Limited by Share Ltd (hereinafter referred to as "Huafeng spandex"), which is engaged in processing, manufacturing, marketing and technology development of Spandex Products, released its performance forecast for the first half of 2019 in July 13th. It is estimated that the net profit of the company in 2019 is 1-6 yuan to 236 million yuan to 285 million yuan, which was 248 million yuan in the same period last year, up -4.89% to 14.86% over the same period last year.

The company said that the above prediction is based on the following reasons: during the reporting period, the downstream demand of spandex is weak, the market competition is intense, and the selling price of products is lower than that of the same period last year. The company carries out the management policy of "full production, marketing, excellent structure, strong advantages and risk prevention", focuses on the market trend, optimizes the product structure, and actively develops key target markets. The sales volume of products has been raised over the same period last year, and the production cost has been effectively controlled, which has declined compared with the same period last year.

Industry insiders said that since the first half of this year, the downstream demand of spandex has been weakening, and the price of spandex has been declining compared with the same period. However, the sales volume has increased year by year. Although the price of spandex has continued to drop, with the completion of the technical transformation in Ruian, the sales of spandex sales are increasing against the optimization of the structure of the Huafeng spandex product. It is estimated that in the second half of the year, with the difference of 60 thousand tons of Chongqing, the commissioning of the advanced spandex production capacity will lead the company into a new round of performance growth.

Wu Di, an analyst with CICC, said that since the first half of this year, the price of spandex has dropped slightly, with an average price of 32 thousand and 400 yuan / ton, down 11.2% compared with the same period last year. As the spandex industry continues to shuffle, the industry leaders accelerate the expansion of production. In 2018/2019, the new capacity of the industry is 8/10 million tons, and the phased production capacity is facing an excess. However, the improvement of industry concentration is conducive to optimizing the long-term supply structure. In addition, the main raw materials PTMEG and pure MDI of spandex have dropped sharply since 2018, and the cost side support is weak.

Judging from the observation, Huafeng spandex plans to expand production capacity of 100 thousand tons over the past 2019-2021 years, and the market share is further improved. At the same time, the company relies on energy cost advantages and scale advantages, and the cost is less than 3000 yuan / ton. It is expected that after the reshuffle of the industry, the leading position of Huafeng spandex will be further highlighted.

At present, Huafeng spandex has announced the acquisition of the new draft material for Huafeng, and intends to acquire 100% stake in Huafeng new material at a 12 billion yuan consideration. The main business of Huafeng new material is the production and sale of polyurethane raw fluid (420 thousand tons in 2019), polyester polyol (420 thousand tons in 2019) and adipic acid (480 thousand tons of capacity in 2019), and the Huafeng spandex belongs to the polyurethane industry chain. The products are applied to different segments of polyurethane products. Considering that Huafeng new material business and Huafeng spandex main business belong to polyurethane products, Wu Di believes that the acquisition will produce better synergy effect and help the company become bigger and stronger.

Public information shows that Huafeng spandex was founded in December 1999. It is a subsidiary company of Huafeng Group. It specializes in the production, sales and technology development of spandex fiber. At present, it has 111 thousand tons of spandex production capacity, the first in the world and second in the world. At present, the spandex production capacity accounts for about 20%.

The industry insiders said that with the third, fourth phase of Chongqing base differential spandex put into operation, it will help Huafeng spandex production capacity and profitability to a higher level. The three phase of 60 thousand tons is expected to reach production in August 2019, and the four phase of 40 thousand tons is expected to reach production by the end of 2021. If 100 thousand tons of differentiated spandex project is built according to expectations, the total capacity of the company will reach 210 thousand tons after completion. The market share in the industry will be increased to 30-35%. At the same time, the product differentiation rate and the cost of spandex production will be increased, so as to further consolidate and expand the scale advantage of the company, promote the concentration of the industry, and promote the positive development of the spandex industry.