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Xinhecheng (002001): PPS anti-dumping VE prices continue to rise

Xinhecheng (002001): PPS anti-dumping VE prices continue to rise

On May 30, the Ministry of Commerce announced an anti-dumping investigation against imported polyphenylene sulfide (PPS) products originating in Japan, the United States, South Korea and Malaysia.

The applicant for this anti-dumping investigation is Xinhecheng, and the supporting company is DSM Xinhecheng Engineering Plastics Co., Ltd.

Foreign dumping has reduced the domestic PPS operating rate, and the production and sales rate has decreased.

This anti-dumping is mainly targeted at PPS production companies such as Toray, Toyobo, Disheng, Solvay.

According to the announcement of the Ministry of Commerce, the PPS demand for 2018 was 54,544 tons, the import was 32,091 tons, and the import dependency was 58.

84%.

The share 北京夜网 of domestic cities in the four-country manufacturing enterprises and their affiliates in China is 54.

At 31%, its quota in China is much lower than its domestic scale (dumping margin: 40% -105%). Therefore, the domestic PPS companies have replaced the operating rate (average 40%), and the production and sales rate has decreased significantly in recent years.

Xinhecheng PPS is in the period of capacity release and is expected to benefit from PPS anti-dumping.

The company’s PPS Phase 2 is expected to reach capacity in July 2018, with a total capacity of 1.
.

5 Every day, the first phase of 5000 tons certification is added smoothly. The PPS capacity is released quickly. In 2018, the output was 10970 tons (+ 97%), the sales volume was 9701 tons (+ 104%), and the revenue was 3.

9.8 billion (+ 152%).

In 2018, 深圳桑拿网 Xinhecheng’s PPS output accounted for about 30% of China’s domestic output, and if the affiliates of the four countries in China were excluded, it would exceed 50%.

The new and low-cost anti-dumping application also reflects its leading advantage in domestic PPS. If anti-dumping is fully beneficial through promotion.

VE prices have continued to increase recently, rising from 40 yuan / kg in March to 53 yuan / kg.

On the demand side, even if domestic vitamin demand was affected by swine fever in the first half of the year, poultry meat and exports were better, and overall growth remained stable. On the supply side, environmental protection tended to be serious and there were no new entrants. We can cooperate with DSM to improve and improveCompetitive appearance, and does not rule out the possibility of DSM’s production line transformation in the future.

We forecast the company’s net profit attributable to mothers in 2019/20/2123.

11/29.

03/32.

60 billion, EPS1.

08/1.

35/1.

52 yuan, corresponding to the current price of PE 18.

6/14.

8/13.

2x, maintain “Buy” rating.

Risk reminder: vitamin prices fall; new project production progress is less than expected; this anti-dumping has a one-year investigation period, and the final ruling of the Ministry of Commerce may not be found to be valid