Entering 2020, the economic situation at home and abroad remains complex and severe. Affected by the epidemic at the beginning of the year, the overall demand of the chemical fiber industry has weakened, the contradiction between supply and demand has become prominent, market prices have dropped, and industry profitability has declined. No matter what the chemical fiber market is like, in order to gain greater advantages and not miss opportunities in the future, polyester “big guys” are still making big moves in the industry represented by leading companies.
46.9519 million shares settled in Hengyi The fifth largest shareholder of Cheng Tongkun
Previously, the editor had reported: Recently, the secretary of the board of directors of Hengyi Petrochemical said in response to investors’ questions on the Shenzhen Stock Exchange’s Interactive Receipt that the company The controlling shareholder Zhejiang Hengyi Group Co., Ltd. (hereinafter referred to as “Hengyi Group”) invested in Tongkun Group Co., Ltd. (hereinafter referred to as “Tongkun Shares”) mainly “based on its optimistic expectations for the future development of the polyester industry and in order to enhance the company’s The core competitiveness of the polyester industry, considering that the valuation of the petrochemical-chemical fiber sector is at a historically low level.” It is understood that in the first quarter report of Tongkun Co., Ltd. in 2020, Hengyi Group became the top ten shareholders in one fell swoop, ranking fifth, with a shareholding of 46.9519 million shares and a shareholding ratio of 2.49%. In the list of major shareholders in Tongkun’s 2019 annual report, Hengyi Group did not appear.
As of the end of the first quarter of 2020, the major shareholder of Tongkun Shares is Zhejiang Tongkun Holding Group Co., Ltd., which holds The ratio is 25.16%, with 464 million shares held and 121 million shares pledged; the second largest shareholder is Jiaxing Shenglong Investment Co., Ltd., with a shareholding ratio of 12.19%, 225 million shares held and 39 million shares pledged; the third largest shareholder Chen Shiliang holds 5.77% of the shares and holds 106 million shares. According to the financial report, the above three shareholders are persons acting in concert.
Tongkun and Hengyi are both giants in the chemical fiber industry. In the 2018 China chemical fiber industry output rankings announced at the China Chemical Fiber Technology Conference held in June 2019, Tongkun and Hengyi ranked first in POY and FDY production capacity respectively.
The output of Hengyi Petrochemical polyester fiber in 2019 was 563.72 million tons, with a polyester fiber production capacity of 6.35 million tons/year, of which polyester filament (including POY/FDY/DTY/slice) production capacity is 5.47 million tons/year, and 1.35 million tons/year of new polyester fiber production capacity has been invested and planned;
Why does Hengyi Group invest in Tongkun shares? Orient Securities analyst Zhao Chen analyzed that Tongkun Co., Ltd. is currently the world’s leading polyester leader, and its profitability far exceeds that of its peers. It is expected that its reasonable ROE center will be more than 10%. The company’s production capacity will reach 7 million tons after the Hengchao 500,000 tons project is put into operation this year. For example, the 2.4 million tons polyester + 5 million tons PTA project in Dongyangkou Port has also been launched, maintaining the company’s consistently steady pace of production capacity growth. The advantage of Tongkun Co., Ltd. is that it currently has 9.8 billion in cash and only 4.3 billion in interest-bearing liabilities. The main capital expenditures in the future are 2 billion for the second phase of Zhejiang Petrochemical and 2-3 billion for polyester per year. It basically no longer needs external investment. Financing. Therefore, although there are currently 5.7 billion unconverted convertible bonds, even assuming that all of them are converted, their market value is only 27 billion, and the PE under normal industry prosperity is about 9 times.
As for Hengyi Group, Zhao Chen believes that it has always adhered to a columnar strategic layout with thick upstream and downstream sides. Brunei Refining and Chemical was successfully put into operation at the end of 2019. Although the production capacity scale Not big, but the location still brings unreplicable advantages in sales, supporting facilities, taxation, etc. It also avoids fierce domestic competition, and the long-term return rate should not be low. PTA Company belongs to the first echelon in the industry and plans to invest in the construction of 6 million tons of new production capacity in the future to consolidate its existing position. Since the company’s production capacity of polyester is mainly based on mergers and acquisitions, the layout is relatively scattered. Objectively speaking, it does not have a strong cost advantage. The Haining new material project under construction will be its first single large-scale base with a million-ton level. In the future Competitiveness is expected to improve. Since refining and PTA account for a high proportion of the company’s assets and income structure, the company will also maintain simultaneous expansion of upstream and downstream in the future. Therefore, in addition to judging the polyester boom, its profits also depend on the situation of refining and PTA. In addition, from the perspective of production capacity to market value ratio, its profit elasticity will be lower than Tongkun shares, but overall it will also benefit.
Domestic production of polyester “Big Mac” is 47.51 million tons, and Tongkun and Hengyi have firmly established the “Big Mac” of polyester filament Half of the country”
Thanks to the rapid development of downstream textile production and import and export trade, my country’s polyester demand is strong and has been expanding for a long time. my country’s polyester production has dropped from 39.1798 million tons in 2015 to It has continued to rise after 37.5263 million tons in 2016. Polyester production in 2019 was 47.51 million tons. Polyester filament is the chemical fiber variety with the widest range of applications and the largest usage. my country’s civil polyester industry has entered a stable stage with mature technology and technology and a wide range of applications. In 2019, long fiber production accounted for 78.53% of the total polyester production; short fiber production accounted for 21.47%.
In 2015, the National Development and Reform Commission issued the “Petrochemical Industry Planning and Layout Plan”, proposing to encourage mid-to-high-end petrochemical product production equipment such as PX, with serious market shortages, large market potential, high investment intensity, and high industrial relevance. investment; the “Thirteenth Five-Year Plan Development Guidance for the Chemical Fiber Industry” states that the state encourages “large-scale and strong purified terephthalic acid-polyester enterprises and caprolactam-nylon enterprises to realize refining, chemical fiber and Integrated textile production improves industrial chain control capabilities and comprehensive competitiveness.” Large-scale private petrochemical and polyester production companies such as Rongsheng, Shenghong, Hengli, Hengyi, Tongkun and Xinfengming focus on the layout of upstream petrochemical products, open up the “PX-PTA-polyester” industrial chain, and create an integrated industrial chain. The main development trends of the polyester industry in recent years.
In 2019, the polyester filament production capacity of Tongkun Group, Xinfengming, Shenghong Group, Hengli Group, Hengyi Group, and Rongsheng Group respectively expanded to 6.9 million tons/year. , 4.3 million tons/year, 2.1 million tons/year, 1.55 million tons/year, 6.35 million tons/year, 1.25 million tons/year. The total industry production capacity is 41.55 million tons/year, CR6 accounts for 54%, and the industry concentration is substantial. promote. Currently, the domestic polyester industry is dominated by eight companies (groups), including Hengli, Rongsheng, Tongkun, Hengyi, Shenghong, Xinfengming, Sanfangxiang and Sinopec, supplemented by a number of small and medium-sized enterprises. industry structure. In the next 2 to 3 years, the expansion of the domestic polyester industry chain will be reflected in improving the industry chain and pursuing economies of scale, thereby enhancing comprehensive competitiveness and risk resistance.
Among them, Tongkun and Hengyi are leaders in the industry. These two companies have always adhered to the main business of polyester filament to become more refined and stronger. In the past few years, they have relied on their cost advantages. During the trough period of the industry, it also achieved expansion against the trend, gradually widening the scale gap with its competitors. With this cooperation, not only its production capacity and competitive position have secured “half of the world” in polyester.
The polyester filament industry enters 3.0: grabbing market share and becoming a technical barrier!
This polyester filament cycle is very different from the previous one. We think it is mainly manifested in two aspects:
First, this round of recovery is the result of natural changes in the industry’s supply and demand pattern, rather than through unconventional stimulus measures. Although the price difference level of related products has recovered significantly from the trough period, it is not the same as the profiteering situation at the high point of the previous round of prosperity.
Second, the industry order has undergone fundamental changes. It is also the capacity expansion cycle after the boom cycle. Because the previous cycle had the characteristics of huge profits, it attracted many players to participate in the construction of production capacity, causing the industry order to lose control. However, the pace of capacity expansion after the current round of cycles is relatively stable and orderly and controllable.
We believe that the differentiation trend of the polyester filament industry will become increasingly significant in the future. On the one hand, most of the companies currently at the forefront of the industry have a background as listed companies or are about to complete the listing process, with strong financial strength and smooth financing channels. On the other hand, such enterprises have the conditions and ability to continuously promote the use of new technologies and new processes to ensure that their products are marketable. Coupled with economies of scale, their cost advantages will continue to be strengthened.
In recent years, the big players have continued to engage in reorganization and expansion. This series of intensive actions has also made the industry deeply aware of their pace of intensifying the layout of the entire industry chain. Whether today’s big players are “fighting alone” or “joining forces”, it can only show that seizing market share and enhancing competitive advantages is the general trend. The current polyester chemical fiber industry is transforming from unbalanced development to balanced development in the past, and only companies with competitive advantages across the entire industry chain can be the first to benefit from the balanced development of the industrial structure, and can they always be “smiling and proud”! </p
