Dyestuff Enterprise Reemployment Rate Exceeds 90% Product Price Rise Or Promote Industry To Usher In "Little Spring"

The dyestuff and chemical industry, which showed relatively low performance in 2019, was warmer in 2020 after the Spring Festival. After the A share market resumed in the Spring Festival, the dye chemical sector rose from the lowest 892.02 points to 1337.61 points, or nearly 50%.

At the same time, according to the Industry Association survey, after the middle of February this year, most of the printing and dyeing industry in China has come back to work. Especially in the two provinces of Jiangsu and Zhejiang, the recovery rate is over 70%. Against this background, the products of chemical dyestuff and dye industry have also been greatly increased, and the main intermediate of disperse dyes (2- aminoacetaminophen) has increased by more than 150% in.

Zhang Guoliang, an analyst with the information dye industry, told the associated press that at present, it is benefiting from the influx of downstream printing and dyeing enterprises and the impact of the new effective production capacity of the industry. There is room for improvement in the price of dyestuff and chemical industry in the short term, and this industry is expected to last until April this year.

Recovery rate exceeds 90%

The printing and dyeing industry, which has a clear relationship with the national economy and people's livelihood, is affected by the outbreak of the new coronavirus. However, after the Spring Festival, the resumption of work has been carried out in an orderly way.

According to the Research Report of the printing and dyeing industry association reopening, as of February 29th, 168 of the 180 key printing and dyeing enterprises in the country have resumed work, and the recovery rate is 93.33%. The total number of employed workers in 148 enterprises is about 164470, and the number of workers coming to the posts is about 93651, and the rate of workers being on duty is 56.94%. According to the data of operating rate feedback from enterprises, most enterprises start up around 70%, and some backbone enterprises have reached 80%~90%, and some enterprises have reached more than 95%.

The printing and dyeing enterprises in two provinces of Zhejiang and Jiangsu are obviously better than other regions. As of February 18th, 46 textile printing and dyeing enterprises in Yancheng City textile dyeing and finishing Industrial Park have been fully restarted, and the number of reemployment employees has reached 6000. Among them, the number of returned workers above designated size is 5000, accounting for 83.33%. As of February 25th, 108 printing and dyeing enterprises in Keqiao, Shaoxing, have resumed 81 production, with a return rate of 75%.

In response, Xu Mingda, head of a dyestuff company in Anhui, told the associated press that the epidemic did bring a great impact on the dyestuff industry. Many companies in the industry were in a state of discontinued production, which seriously affected the whole industry chain, which would have an impact on the company's performance in product prices. But this effect is short-term. With the orderly resumption of work, the industry recovery will soon come.

The large-scale demand for the resumption of downstream businesses has increased the price of dye products. In the past month, the price of the disperse dye intermediate reductant (2- aminoacetaminophen) has risen from 40 thousand / ton a year ago to more than 100 thousand / ton, or more than 150%. The price of dye products is higher than 150%. In addition, in March 2020, the black ECT 300% was quoted at 30 thousand yuan / ton, up 1000 yuan / ton compared with the previous February, or 3.5%, and the active black WNN200% quoted 23 thousand and 500 yuan / ton, up 1000 yuan / ton, or 4.4%, compared with the previous week.

Huachang securities also said that with the continuous resumption of work, dyeing plant replenishment intention increased. The price of disperse dye manufacturers began to be tentatively increased. Cost push up the release of superimposed demand, it is expected that the price of disperse dyes will continue to rise, and the leading company of its own intermediate capacity production chain is expected to continue to benefit.

Or bring industry reversal.

In 2019, the performance of dyestuff and chemical industry was not satisfactory. According to relevant industry data, the overall profits of Listed Companies in chemical industry in 2019 were downward. In the first three quarters of the first quarter of 2019, 347 listed companies realized a net profit of 151 billion 500 million yuan, down 19.72% compared with the same period last year. Of the 347 listed companies, a total of 177 net profits rose year by year, while 170 companies lost profits year-on-year.

Poor performance, resulting in dye chemical industry stocks in 2019, a situation of high opening low. Take Zhejiang Longsheng as an example, after the explosion of Yancheng Chemical Industrial Park in Yancheng, the share price rose rapidly from 11.45 yuan / share to the highest 26.6 yuan / share, or nearly 150%. However, the stock market continued to decline, and the stock price fell to 12.93 yuan during the year, and the highest price rebounded was only 16.37 yuan / share.

Zhang Guoliang, an analyst with information dye industry, told the associated press that the price trend of dye chemical industry is in line with the development of the industry during the year. In March 2019, Jiangsu Yancheng Chemical Industrial Park explosion related enterprises, is an important manufacturer of dyestuff industry. After the explosion, the dyestuff industry chain was affected, and dyestuff enterprises continued to raise prices in the first half of 2019. However, the large-scale increase in prices brought about a significant increase in the production costs of downstream printing and dyeing enterprises, which affected the survival of printing and dyeing enterprises, caused the contradiction between printing and dyeing enterprises and dyestuffs enterprises, and eventually reduced the use of dyes. The price of dyes continued to decline in the second half of 2019. Take the black ECT 300% as an example, the highest price in the first half of 2019 was 43980/ tons, while the lowest price in the second half was only 29000 yuan / ton, and the price per ton dropped by more than 14000 yuan.

And in the year 2020, under the premise of the impact of the epidemic, dye chemical industry has made a good start, and it is expected to bring the market reversal of the whole industry.

Zhang Guoliang told the Associated Press reporter that in recent two months, the main reason for raising the price of chemical dyestuff industry is actually the upgrading of the effective capacity of the printing and dyeing industry. In recent years, the printing and dyeing enterprises in the whole country, especially the two provinces in Jiangsu and Zhejiang provinces, have been carrying out industry integration and technology upgrading, replacing the backward production capacity with new production capacity with environmental protection. Since 2019, although many small and medium-sized printing and dyeing enterprises have been shut down in two provinces of Jiangsu and Zhejiang, the new production capacity of large printing and dyeing enterprises is constantly increasing after the merger and transformation. Therefore, the amount of dyestuff products has been steadily increased since 2019, which brings new foundation for the development of dyestuff and chemical industry.

Zhang Guoliang also told the Associated Press reporter that with the full resumption of printing and dyeing enterprises, production will gradually revert to normal level in April, and the demand for dyestuff products will peak in April, so the current good situation will last until April 2020.

In response, a management officer of run Tu shares told the associated press that "the epidemic is coming to an end, and the demand for industry will be vigorous. With the arrival of demand, the price of natural products will increase significantly, and this situation will last for some time."

Industry leading low valuation

Although affected by the epidemic, after the Spring Festival of 2020, the chemical dyestuff plate took the lead in the A share market.

Plate leader dragon Zhejiang (600352.SH), after the Spring Festival, the share price rose from the lowest 11.09 yuan to 15.35 yuan, or more than 40%. The 603980.SH rose from the lowest 6.4 yuan / share to the highest of 9.37 yuan, or over 40%, and the highest rise of 002440.SZ shares reached 33%.

As of February 25th, A shares dye plate, or nearly 50%.

However, there are still analysts who believe that the overall valuation of the dye industry is at the bottom of the history, and that the industry's leading valuations are also low. For example, the performance reversal in 2020 is undoubtedly a great benefit for the whole industry sector.

According to the Research Report of China Merchants Securities, as of December 16, 2019, the average PE value of CITIC basic chemical industry was 32.95, the median value was 29.87, the PB mean value was 3.02, and the median value was 2.77. This valuation is not consistent with the status of China's dyestuff and chemical enterprises.

Leading enterprises in Zhejiang Longsheng, Ru Tu shares and Kyrgyzstan group's total market share of disperse dyes reached 80%.

Orient Securities Research Report shows that Zhejiang Longsheng is the leading enterprise of dyestuff and intermediates, enjoying the global pricing power, and its profitability is significantly better than that of its peers. And from the industry, the supply side is limited, and the demand for the downstream is limited, so as to achieve the balance between supply and demand. As an oligarch of the industry, Zhejiang Longsheng can maintain profits through controlling production and sales volume, and the fluctuation of industry price is weakened, and the profit level can maintain a relatively normal state.

However, from the valuation point of view, the price earnings ratio of disperse dye stocks is generally less than 30 times, among which Zhejiang Longsheng, Ru Tu shares and Jihua Group have less than 10 times rolling price earnings ratio. Zhejiang Longsheng has the lowest profit rate of 9.32 times.

A brokerage analyst told the associated press, Zhejiang Longsheng in 2019 because of the Jiangsu Yancheng Chemical Industrial Park explosion, the stock price was quickly pulled up in the short term, which for Zhejiang Longsheng, it is actually disrupting the pace of the development of the two tier market, for the development of enterprises is not good. At present, Zhejiang Longsheng valuation is at a low level, which is more valued by the market and investors. For dye and chemical industry, the repair and upgrading of valuation is a long-term process, which is just as urgent as the steady development of enterprises.