Bio-Chem (603360): Fungicide Leader Productivity Released, Superimposed Product Price Development and Entering Fast Track

Bio-Chem (603360): Fungicide Leader Productivity Released, Superimposed Product Price Development and Entering Fast Track

The company is the largest isothiazoline bactericide leader in China and even in Asia. Its products cover several major systems such as CIT / MIT, MIT, OIT, DCOIT, BIT, etc., and provide sterilization solutions for industrial water treatment, papermaking, daily chemical and other end application industries.Solutions and Compounding Products.

The company has three production bases (Dalian Lushun Base, Dalian Songmu Island Base, and Shenyang Base) with a capacity of about 3 tons.

Relying on its comprehensive advantages in terms of production capacity, product quality and cost advantages, the company cooperates with giants such as Dow Chemical, LANXESS, Germany, and Lonza, USA. In addition to covering domestic provinces, the products are exported to Europe and the United States.

The demand for industrial fungicides is growing rapidly, and the supply contraction may cause prices to rise. Global industrial fungicide production in 2017 was about $ 14.5 billion, of which the market size was about $ 5.9 billion, of which the domestic market size was about $ 11.1 billion, and the demand growth rate exceeded 8%.Higher than the global growth rate of 3%.

Isothiazolinone fungicides have excellent performance and have become mainstream non-oxidizing fungicides.

Due to cost, environmental protection and other factors, international giants such as Dow Chemical, Sol Corporation and other companies have significantly reduced the production of original medicines and turned to external procurement. They have focused on providing formula and technical 夜来香体验网 services. The global production capacity of isothiazolone fungicides has gradually moved to China.Transfer.

In addition, due to Jiangsu Fubia and Dalian Xingyuan Chemical’s production suspension, the industry’s contraction in supply tried to push up prices, and the company’s performance was highly flexible.

Residual o-chlorobenzonitrile is obvious, and the price may greatly increase. O-chlorobenzonitrile is an important organic synthesis intermediate. The downstream includes BIT, disperse dyes and saltan drugs. The total domestic demand is expected to exceed 3 indicators.

The security accident in Yancheng affected Lianhua Science and Technology. Jiangsu Changhai combined 2 alternative production capacities, accounting for about 2/3 of the domestic market, and gradually increased the price of o-chloroaniline.

The company’s existing 3,000 tons of o-chlorobenzonitrile, supplementing 7,000 tons, was just in time for production. Based on a 1-ton capacity measurement, the product price increased by 1 million tons per year, and the annualized thickening performance was about 70 million, with great performance flexibility.

Raising investment projects to improve the industrial chain and break through capacity expansion The company’s 2018 comprehensive capacity conversion of fungicide products has reached 98.

13%. With the existing production capacity being fully utilized, the overall situation of supplementing job hunting remains unchanged. The problem of insufficient production capacity has been the main measure for the company’s rapid development before the project is put into production.

With the investment projects of CIT / MIT 12,000 tons, OIT 400 tons, BIT 2500 tons and B / F Nano 10,000 tons projects put into production, the company entered the fast track of development.

In addition, the Shenyang base of the company’s three major production bases has an area of 130,000 square meters and currently has an area of 4 in use.

70,000 square meters, coupled with the increase in the company’s asset-liability ratio, operating cash flow is good, and can only break through the expansion of production space.

Profit forecast and investment suggestions: Through the company’s fund-raising projects CIT / MIT, o-chlorobenzonitrile and BIT and other product capacity releases, at the same time the product price caused by the industry supply contraction increases, the company’s performance is expected to grow.

We estimate the company’s net profit attributable to its parent to be 3 to 2019-2021.

99/4.

53/3.

850,000 yuan, the current price corresponding to 2019 PE is 12.

7 times.

Reference to comparable company PE estimates (15/2019.

7 times), we give the company a target price of 33.

44 yuan / share, the first coverage given a “buy” rating.

Risk reminder: The progress of fundraising and investment projects exceeds expectations, and product prices reduce risks.