On August 29, Xinfengming released its semi-annual report, with revenue of 23.7 billion yuan, up 0.14% year-on-year, and net profit of 394 million yuan, down 70% year-on-year. The company said the decline was mainly due to fluctuations in crude oil prices, while the impact of the coronavirus pandemic in China also put pressure on downstream operating rates, which in turn affected the production, sales and price gap.
Against the market, we increased research and development, and continued to increase the market share of investment in production capacity
Although the performance declined due to the influence of the external environment, Xinfengming still maintained high investment in R&D. The R&D investment in the first half of the year was 480 million yuan, an increase of more than 60 million yuan year-on-year, an increase of 15%. According to Flush iFind, among the more than 4,000 listed companies in Shanghai and Shenzhen that have been disclosed as of press time, Xinfengming ranks 168th in R&D investment, the highest.
In the research and development results, new Fengming has successfully developed a number of differentiated products. From the perspective of market demand, the application field of high performance, differential and ecological fiber is constantly expanding to industrial fields such as transportation, new energy, medical and health care, infrastructure, safety protection, environmental protection, aerospace and so on. In the future polyester market, chemical fiber with high added value will gradually become a new growth point of the industry.
In terms of production capacity, the company has a production capacity of 6.3 million tons of polyester filament, 600,000 tons of polyester staple fiber and 5 million tons of PTA. By the end of 2022, the company is expected to add about 300,000 tons of polyester filament capacity and 600,000 tons of polyester staple fiber capacity. By then, it will have a capacity of 6.6 million tons of polyester filament capacity and 1.2 million tons of polyester staple fiber capacity.
With the continuous release of production capacity, the market share of the company has been rising all the way. In 8 years, the market share has increased from 5% to over 12% at present. However, the development of small and medium-sized enterprises is not optimistic. Affected by environmental protection limit, epidemic, logistics and other external factors, it has brought great challenges to chemical fiber enterprises in recent years, and driven the gradual withdrawal of low-end production capacity. According to media reports, the recent closure and liquidation of long-established chemical fiber enterprise Changle fiber, 300,000 tons of polyester filament production capacity exit, which means that the external impact on the living space of medium-sized chemical fiber enterprises continue to compress. With the clear industry pattern and increasing industry concentration, CR4 production capacity accounts for more than 60% of the total national production capacity, up by about 6 percentage points compared with 2019. The market is expected to further enhance the concentration of production capacity in the future, deduce the industrial situation of the strong constant strength.
Third quarter filament spread gradually repair
Despite the company's poor first-half performance and the lowest profit since listing in the second quarter, its valuation has been breaking new lows, with the P/E ratio falling below 7 times at one point, corresponding to the P/E quantile of 0.18%. From the perspective of valuation, as of August 26, the net ratio of New Fengming market was 0.94, breaking the net assets. According to the research report of Industrial Securities, according to the replacement cost method, if the company purchases assets again, the total asset value will be 35.8 billion yuan, while the current total market value of the company is less than 15.5 billion yuan. But Mr Xinfengming remains optimistic. So far, the company has repurchased 15.55 million shares this year, and the amount of repurchase is 175 million yuan, which has exceeded the lower limit of the repurchase plan, and the average price of repurchase is 11.26 yuan.
At present, the third quarter filament spread gradually repair. As of August 15, the price difference of POY in the third quarter reached 1,262 yuan/ton, +38.3% quarter-on-quarter; The price difference of FDY in the third quarter reached 1,808 yuan/ton, +26.4% quarter-on-quarter. Industry insiders said that the change of season of "gold nine silver ten" autumn and winter textile clothing will also bring significant improvement on the demand side. Combined with the current low raw material inventory in the downstream, the demand peak in the second half of the year is expected to occur.
According to Open-source Securities, with the improvement of production capacity concentration in polyester industry chain from top to bottom, Xinfengming, as the industry leader, extends upstream to open up the "PTA-filament" industry chain, and at the same time develops horizontally into the field of polyester staple fiber, which has industrial chain advantages and will further consolidate its competitive advantages in the future. At the same time, we will maintain our scale advantage and continue to promote production capacity expansion. In the future, we are expected to gain excess profits and have sufficient growth momentum.
