Petrochemical Giant Hengyi Group Lightning Attack, Take 46 Million 50 Thousand Shares Of Tong Kun Shares As Shareholders

? In May 26th, the manager of Hengyi Petrochemical Co., Ltd., answering the investor's questions at the Shenzhen Stock Exchange's interactive voucher, said that the controlling shareholder of Zhejiang Hengyi Group Co., Ltd. (referred to as "Hengyi group") shares the Limited by Share Ltd of the Tong Kun group (hereinafter referred to as "Tong Kun stock"), mainly based on the expectation of the future development of the polyester industry, and to enhance the core competitiveness of the polyester industry in the company. Competition, taking into account the petrochemical - chemical fiber plate Valuation Department at a historic low.

It is learned that Tong Kun shares and Hengyi group are both giants of chemical fiber industry. In May 28, 2020, China Chemical Fiber Association released the 2019 China chemical fiber industry output ranking, Tung Kun and Heng Yi came first and second respectively.

Reporters read the announcement learned that as of the first quarter of 2020, Tong Kun shares the ten largest shareholder details, Hengyi group holds 46051999 shares, the shareholding ratio of 2.49%.

The main products of Tong Kun are all kinds of civilian polyester filament, including more than 1000 series of four series, including polyester POY, polyester FDY, polyester DTY and polyester composite wire, covering the whole series of polyester filament products. In the industry, there are "WAL-MART in polyester filament industry". In the 19 consecutive years, polyester filament sales ranked first in the market. In 2010, the company's operating income was 14 billion 700 million yuan, and its revenue reached 50 billion 600 million yuan in 2019, CAGR15%; in 2019, the net profit of the company returned to the parent company was 2 billion 880 million yuan, the highest level in history. The company's sales income is mainly made of polyester filament yarn, and its annual income is 84.5% in 2019. PTA is mainly self supporting and sold very little, and trade and other businesses account for 9.8%.

The controlling shareholder of Tong Kun is Zhejiang Tong Kun Holding Group Co., Ltd., with a shareholding ratio of 25.16%, which is controlled by Mr. Chen Shi Liang. The company has a large number of subsidiary companies, including Zhongzhou chemical fiber, Hengtong chemical fiber, Hengsheng chemical fiber, Hengteng differential chemical fiber, Hengji differential chemical fiber and so on, which produce all kinds of polyester filament, and produces PTA production base of Jiaxing petrochemical company. Tong Kun invested 20% stake in Zhejiang Petrochemical Company.

According to the data from China Chemical Fiber Industry Association, as of 2015, the number of enterprises with more than 20 million scale income of polyester industry in China was 776. Among them, 6 companies of Tong Kun, Xin Fengming, Sheng Hong group, Hengli Group, Hengyi group, Hengyi group and Rongsheng group (CR6) have competitive advantages in scale, management, brand and innovation, and their capacity exceeds 1 million Tons per year.

In 2014, Tong Kun, Xin Fengming, Sheng Hong group, Hengli Group, Hengyi group, Rongsheng group polyester filament production capacity was 2 million 790 thousand tons / year, 1 million 670 thousand tons / year, 1 million 260 thousand tons / year, 1 million 280 thousand tons / year, 1 million 100 thousand tons / year, 1 million 20 thousand tons / year, the total capacity of the industry 26 million 280 thousand tons / year, CR6 accounted for 35%; after the development of 5 years, 2019 Tong Kun group, Xin Fengming, Sheng Hong group, Hengli Group Heng Yi group, Rongsheng group polyester filament production capacity expanded to 6 million 900 thousand tons / year, 4 million 300 thousand tons / year, 2 million 100 thousand tons / year, 1 million 550 thousand tons / year, 6 million 350 thousand tons / year, 1 million 250 thousand tons / year, the total capacity of the industry 41 million 550 thousand tons / year, CR6 accounted for 54%, industry concentration increased significantly.

According to the financial report, in 2019, Tong Kun realized its operating income of 50 billion 600 million yuan, an increase of 22% over the same period last year, and realized a net profit of 2 billion 880 million yuan attributable to the parent company, an increase of 36% over the same period last year.

Zhao Chen, an analyst at Orient Securities, said that Tong Kun is currently the world's leading pet leader and its profitability is far ahead of its peers. It is expected that its rational ROE hub will have more than 10%. The company's capacity will reach 7 million tons after the commissioning of the company's 500 thousand tons project this year, and the 2 million 400 thousand tons of polyester +500 million tons PTA project in Rudong port has also been launched to maintain the company's steady pace of capacity growth. The advantage of Tong Kun's shares is that its cash in hand has reached 9 billion 800 million, and only 4 billion 300 million of the interest bearing liabilities. The main capital expenditure in the future will be the two phase of Zhejiang Petrochemical's 2 billion and the polyester fiber's annual sales of 20-30 billion, which basically no longer need external financing. Therefore, although there are 5 billion 700 million of the non convertible bonds, there is only 27 billion of the market value even if all the shares are transferred, and the PE of the industry is about 9 times normal.

For Hengyi group, Zhao Chen believes that it has always insisted on the strategic layout of the upper and lower sides of the column. At the end of 2019, Brunei refinery went into operation smoothly. Although the scale of production was not large, its location still brought advantages such as sales, matching, taxation and so on. It also avoided the fierce competition in China, and the long term rate of return should not be low. PTA company belongs to the first tier in the industry. In the future, it plans to invest 6 million tons of new capacity to consolidate its existing position. Polyester as a result of mergers and acquisitions of the company's capacity, the layout is more dispersed, objectively speaking, does not have a strong cost advantage, while the construction of new materials in Haining will be its first million tons of a single large base, the future competitiveness is expected to improve. As refinery and PTA account for a relatively high proportion of the company's assets and revenue structure, Future Ltd will also maintain a simultaneous expansion of the upstream and downstream sectors. Therefore, in addition to judging the prosperity of polyester, it also depends on refining and PTA. In addition, from the perspective of capacity market value, its profitability elasticity will be lower than that of Tong Kun, but it will also benefit from the whole.

Zhao Chen said frankly, from the supply side, the new capacity of the polyester industry is concentrated in several leading companies, with an annual capacity of 200-300 tons, corresponding to the supply growth of 6%-7%, while the demand side has a compound growth rate of about 7%, which basically matches supply and demand. Therefore, aside from the impact of one-time shocks such as oil price and epidemic situation, the long term profit determined by supply and demand of polyester itself should be relatively stable. In the case of gradual recovery of demand, the future price spread rate will return to a reasonable center of about 1400 yuan / ton. In addition, this year will be the first year for PX and PTA profits to move downstream. This year, the price difference of PX is 263 US dollars / ton, and the spread of PTA is 593 yuan / ton, down 30% and 43% respectively from 2019. In the future, the supply side of these two links is facing the pressure of massive capacity release, and the profit level is also hard to return to the previous high level. This also means a systematic decline in the cost center of the industry, which is undoubtedly good for the long-term healthy development of the whole industry chain, and the corresponding polyester and downstream links will benefit.

In Zhao Chen's view, the long-term profitability of dacron is determined by trade barriers, and it does not think that it can undertake the profit transfer of PX and PTA for a long time. However, in the case of continuous demand and low inventory in the future, dacron will be able to benefit from stages because of its relatively strong upstream and downstream pricing power, which will also contribute to future price differentials and earnings recovery.

According to public information, Heng Yi Petrochemical is the core listed subsidiary of Zhejiang Hengyi Group Co., Ltd. (founded in 1974). It has been the first to build polyester melt direct spinning and PTA projects in the national private enterprises. The company has set up state-level enterprise technology center and postdoctoral scientific research workstation. Step two prize.

Heng Yi petrochemical, formerly known as Xiaoshan County Yamen former commune knitting factory, was founded in 1994. Hengyi group has formed a production and operation system of chemical fiber spinning, weaving, dyeing and finishing. In the year of 2001~2003, Hengyi polymer has been put into production one to three, and has gradually been stripped of textile and extended to the upstream polyester. In 2005~2009, more than 1000 sets of PTA have been put into operation. In 2011, the company was listed on the Guanghua Shenzhen Stock Exchange, which was put into operation in 2012.

In the 2017-2019 year, Hengyi Petrochemical Company acquired many polyester factories (3 million 300 thousand tons), such as Longteng, Ming Hui, Hongjian and so on. The polyester ginseng production capacity increased to 7 million 250 thousand tons, and the equity production capacity exceeded 6 million tons. In the future, with the Jiaxing ypeng three and Haining new material polyester put into operation, the capacity will reach 7 million 300 thousand tons. In addition, the company's PTA has 6 million 300 thousand tons of capacity and 200 thousand tons of caprolactam production capacity.

According to the financial report, in 2019, Hengyi petrochemical company achieved 79 billion 600 million yuan of operating income, down 9.59% compared to the same period last year, and the net profit attributable to shareholders of listed companies was 3 billion 200 million yuan, an increase of 70.97% over the same period last year.