The Utilization Rate Of Capacity Reaches 110%, Who Will Benefit Most From The Mask Industry Chain.

Masks, masks, or masks. Whether in the market or in the market, mask supply is still relatively scarce. The stock market is also expensive because of the scarcity of masks. Since January 21st, the plate index has risen by about 40%.

On the news side, although China has newly diagnosed 406 cases (401 cases in Hubei and 370 cases in Wuhan), the growth rate has dropped considerably compared with that before. However, the epidemic situation in other countries outside China is still not optimistic. The latest South Korea has added 169 confirmed cases, and 1146 cases have been diagnosed. The South Korean government has banned the sale of masks from 26 o'clock, and the export volume of manufacturers has been limited to less than 10% of the day's output.

It can be predicted that the supply and demand of masks will be more and more intense in other countries over the world.

In the face of the rapid rise and overdue demand in the future, where will the mask industry chain go?

How much profit can the overload operation bring to the industrial chain?

According to the information released by the new Office press conference, as of 22 days, the daily output of domestic masks has reached 54 million 770 thousand, an increase of 2.8 times than that in February 1st. 570 million days since the last 20 days, the daily production of medical masks has reached 844 thousand, and the utilization rate of the national respirator has reached 110%.

At the same time, according to Ou Xiaoli, director of the social development division of the national development and Reform Commission yesterday, the national daily production of masks has increased by nearly 3 times as compared with the end of the Spring Festival holiday, partly easing the tension. The daily production of medical N95 respirators is over 900 thousand, reaching 1 million at the end of the month, and the total amount can basically meet the needs of the front-line medical care.

Xian Guoyi, director of the Ministry of Commerce and clothing trade, also said that as of February 20th, a total of 1 billion 370 million masks were imported through various trade modes. The import of international medical products to some extent has made up for the shortage of domestic short term production and supply.

How many practical benefits can the overloaded masks produce for the industry chain enterprises?

The complete mask industry chain includes upstream raw materials (mainly polypropylene (PP), polyester, etc.); the middle reaches of the PP non-woven fabric, melted spray cloth, nose bar, ear belt material and mask mask making machine, mask mask spot welding machine, masks packaging machine and other production equipment; downstream mask manufacturers and market circulation links.

Medical masks are generally made up of non-woven fabrics, melt blown fabrics and ear wearing materials. The main structure is three layers (SMS) non-woven fabrics. The main raw material of S layer non-woven fabric is polypropylene fiber material modified by homopolymerization polypropylene (PP) and peroxide. The main material of M layer is melted spray cloth. And the material for ear wear is polypropylene plastic / polypropylene fiber + spandex.

Melted spray cloth is a non-woven fabric produced by melt melting, which is melted by its own fibers. After electret treatment, the fiber carries the charge, and the aerosol of the new crown virus is captured by static electricity. Without changing the respiratory resistance, the filtration capacity of melt blown fabric can reach 95%.

In terms of composition, the raw material of melt blown fabric is made of high melt index polypropylene fiber. In addition, the traditional raw materials also include polyester (PET), polyamide (PA), polyethylene (PE), polyurethane (PU), etc.

As far as raw material supply is concerned, under normal circumstances, high melt index polypropylene fiber production capacity is generally sufficient. Last year, the production of high melt index polypropylene fiber was 950 thousand tons in China. Generally speaking, 1 tons of high melt index polypropylene fiber were enough to produce 200 thousand medical masks. If the whole production capacity is used to produce medical masks, the annual high melt index polypropylene production can produce 190 billion medical masks, which will be enough for 3800 days according to the current 50 million mask production capacity.

In fact, under normal circumstances, the annual production capacity of domestic masks is about 5000000000, and this capacity has accounted for half of the world's total. Under normal circumstances, there will be no big problem with the supply of masks.

However, it is clear that high melting point polypropylene fiber is not all used for the production of medical masks. With the rapid growth of mask demand and the obstruction of logistics, the industrial chain supply and demand has changed significantly.

The demand for high melt index fiber polypropylene will increase. A total of 70 million masks were produced in two months (twenty million months after the first month and fifty million months after the month), with a total demand of 350 tons of polypropylene fiber, accounting for 0.037% of last year's output. However, due to the mismatch of demand and the impact of logistics and transportation, the price of raw materials will rise. Polypropylene prices were historically low, and price increases may bring some benefits to manufacturers.

The same is true for production equipment. According to media reports, the price of a set of mask production equipment has increased from 250 thousand to 1 million 200 thousand, or 380%, while the price of melted cloth has increased from 18 thousand to 80 thousand, or 440%. But how much of the price increase is flowing to middlemen is not known.

At present, the A share listed companies in the upstream industry masks are mainly Sinopec, Donghua energy, Hengli petrochemical, Daun shares and so on. Among them, Sinopec has promised that prices will not rise. The middle reaches of the non-woven enterprises include Xinlong holdings, Jiangnan high fiber, Yanjiang shares, re technology, TEDA shares, and nonban shares; melt blown non-woven production enterprises have regeneration technology and Xinlun technology.

The middle reaches of the equipment suppliers include Zhi Yun shares (as of February 17th, total hand orders 65 sets, intentional orders of more than 300 sets), tusta (100 orders have been opened, scheduled for 25 working days), Tanaka precision machine (10 days after the resumption of work has been put into production 10 line hood assembly line), Zheng Ye Technology (up to 13 days, masks production equipment in hand orders 45, intentional orders 161). Han Chuan intelligent (for the downstream customers masks production equipment, customized production cycle of 2-3 weeks).

As for the downstream industry, there are quite a lot of mask manufacturers, including the original listed companies such as Zhen de medical, Ogilvy medical, Yang Pu medical, Yanan Bi Kang and all trans boundary production masks, such as Guangzhou Automobile Group, BYD, daddy baby, Foxconn and so on.

But it is worth mentioning that the process of masks is very small. Generally speaking, the price of medical masks is about 9 cents per factory, while medical surgical masks cost between 4 cents and 4 cents 5. The profit from OEM production is smaller. According to the factory of Zhejiang Jiangyin mask factory, the factory OEM mask has earned less than five cents per person.

Therefore, even if a large number of enterprises have come out to produce masks, even if the price of masks increases substantially, the popularity of the nationwide mask will not generate much profit. In fact, in the case of malicious price increases, the profit space of each link of the industrial chain is not destined to be too large (excluding the influence of black intermediary).

As for the whole industry chain, the surge in downstream demand is not stimulating the growth of raw material demand, and the profit from downstream foundries is relatively small. Therefore, the greatest benefit may be the equipment suppliers (currently tight supply) and non-woven fabrics and melt blown nonwoven enterprises in the middle reaches.

The second half of the industry: where will the mask industry chain go from?

As far as the masks industry chain is mentioned above (including non-woven fabrics and melt blown nonwovens manufacturers and equipment suppliers), their share price gains are quite ideal since the beginning of the lunar new year, and the rolling price earnings ratio has also risen. However, among the ten listed companies, there are six reports of annual performance, with profits and losses being half and half.

It can be speculated that the boom of the mask industry is not as good as expected.

In the near future, as the domestic epidemic has improved and the epidemic situation in overseas countries such as Japan, Korea, Italy and Iran has been aggravated, the import and export practitioners of domestic medical materials have considered the export items under the premise of domestic demand, and the "mask fever" in the stock market can continue to maintain a certain period of time.

But the epidemic is serious and there will be a day of retreat. According to the industry related data, the total output of China's mask industry in 2018 was only 4 billion 540 million, and the daily production capacity was only 12 million 440 thousand, which is less than 1/4 of the current capacity. When the demand for industry has returned to normal, will the mask industry which has a high exposure rate in the epidemic will return to normal?

Recently, the national development and Reform Commission and the Ministry of Finance issued documents for cross-border production masks. The relevant medical protection materials were included in the national reserve. Enterprises will increase their production strength, expand their production capacity and produce more protective materials such as masks.

But even so, the equipment purchased at a premium may be shelved or even discounted, resulting in a loss.

For enterprises that are still in the industrial chain, it is possible for the downstream mask manufacturers to build brands and take over overseas markets in the long run. At present, foreign brands account for six of the top ten brands of domestic masks. The technical barriers of the mask industry are not high. For the industry, big domestic enterprises are unwilling to enter the market because of the small profit margins.

In the past year, the share prices of the above ten industries listed in the midstream concept were higher than those of the other companies.

Once the market is concerned, what can the masks take?