Organosilicon erupts \"surplus dividend\"

来源: 作者:发布时间: 2019-10-121966次浏览

Global silicone news:



After six to seven years of overcapacity and low prices, the silicone industry finally ushered in a new boom cycle in 2017.





The turning point came in 2016. Under the influence of environmental protection and capacity reduction policies, the domestic silicone production in 2016 showed a negative growth of - 0.16% for the first time, while in 2017, the production fell by 7.08%. During this period, some excess capacity gradually exited.





But demand has been rising. According to the data of prospective industry research institute, since 2008, the compound annual growth rate of apparent consumption of organosilicon in China has reached 13.72%, and it will maintain a growth rate of more than 6% in the future.





The change of supply and demand situation makes the price of organosilicon soar. From 2016 to 2018, from





12500 yuan / ton rose to a maximum of 35000 yuan / ton.





At the same time, the market pattern of the whole industry has changed. The number of silicone monomer manufacturers has decreased from 15 in 2011 to only 12, and the market share of the top five enterprises has increased to 61%. The competitive advantage of the head enterprises becomes more obvious.





Boom cycle price up





After a long industry winter, enterprises can enjoy the dividends brought by the boom cycle. At present, A-share related listed companies Xin'an Co., Ltd. (600596. SH) and Hesheng silicon Co., Ltd. (603260). SH), Xingfa group (600141). SH) both achieved significant growth in performance.





Among them, Xin'an Co., Ltd. (600596. SH), whose pure standard silicone business accounts for 84%, is the most significant one, ranking the third in China with the capacity of 340000t / a silicone monomer, and the net profit of Q3 in 2017 and 2018 increased by 586.87% and 403.19% respectively, an amazing increase.





The silicon of Xin'an shares has the advantages of the whole industrial chain, including silicon ore smelting, silicon powder processing, monomer synthesis and downstream products. The self-sufficiency rate of upstream production raw material metal silicon powder is over 85%, and four series products of silicone rubber, silicone oil, silicone resin and silane coupling agent are formed in the downstream. The layout of the whole industrial chain effectively increases the overall profits of the company.





Hydrochloric acid, a by-product of organosilicon, was used to prepare glyphosate, while chloromethane, a by-product of glyphosate, was used to prepare organosilicon. Xin'an Co., Ltd. is a double leading enterprise of organosilicon and glyphosate, with a glyphosate production capacity of 80000 tons / year, accounting for 11.4% of the country. There is good synergy between the two businesses in the industrial chain.





In addition to the significant increase in net profit, the return on assets of the company also increased dramatically, with the weighted roe of Q3 in 2016, 2017 and 2018 being 1.95%, 12.51% and 23.04% respectively. The rapid growth has nothing to do with the low base in 2015 and 2016.





It is worth noting that the company's Q3 performance in 2018 has reached the peak of profitability in nearly eight years. In the fourth quarter of 2018, the price of organosilicon kept going down from the highest point. Although the price center is still at a historical high, the company's profit peak may be difficult to maintain. At present, the price earnings ratio of Xin'an stock is only 5.4 times, which also reflects the cautious and pessimistic attitude of the market on whether its net profit can maintain a high position for a long time.





Thickened profits of the whole industrial chain





Not only Xin'an, but also the whole industry chain has become the mainstream trend of the development of silicone enterprises. The more perfect the industry chain, the more competitive the market will be. Jiangxi Xinghuo company, Hesheng silicon industry (603260. SH), Dongyue organic silicon and Xin'an Co., Ltd. under China chemical group have become the four enterprises with the highest degree of integration in organic silicon industry, which have obvious cost advantages compared with other enterprises.





Hesheng silicon industry is not only the leading silicone producer in China, but also the largest industrial silicon producer in China, with a total industrial silicon production capacity of 750000 tons. The combination of industrial silicon and organosilicon makes Hesheng silicon industry one of the enterprises with the most complete business chain and the largest production scale in the domestic silicon-based new material industry.





Industrial silicon is an important raw material for photovoltaic materials, organosilicon materials and alloy materials. In the upstream silicon ore smelting field, the company established Hesheng in western Xinjiang in 2010 and built it into a world-class industrial silicon production base. The production cost of industrial silicon mainly includes power cost and raw material cost. The company's Xinjiang base uses local low-cost coal to generate power, and the price is significantly lower than the national average price.





Industrial silicon accounts for 45% of the cost of silicone raw materials, so the gross profit margin of Hesheng silicon is higher than that of Xinan and Xingfa.





Hesheng silicon entered A-share market in 2017, with ROE (weighted) of 42% and 35% in the first three quarters of 2017 and 2018, respectively. In 2017 and the first three quarters of 2018, the company's net profit attributable to the parent company reached 1.517 billion and 2.246 billion respectively, with growth rate of over 130%.





At the same time of the outbreak of performance, the scale of the company is also expanding. When Dongyue organic Co., Ltd. in Shandong Province, the revenue growth of silicon in the third quarter of 2018 before 2017 and 2018 was over 50% in November. In 2018, the first share prospectus entered the stage of going public. In the quarter, 400000 tons of silicon metal project was put into production, and the company became the largest industrial silicon producer in the world. At the same time, the capacity of silicone monomer under construction is 200000 tons, which is expected to be put into use by the end of 2019.


New restricted pattern reconstruction
In addition to Hesheng silicon industry, the 150000 ton silicone monomer project of Xin'an Co., Ltd. is also under construction, and is expected to be completed and put into operation in the fourth quarter of 2019.
The two silicone projects of Hesheng and Xin'an are the only ones put into production in 2019. Although the silicone market is hot and the profitability is outstanding, the new capacity of silicone is relatively limited in the future.