Tongkun Co. (601233): Polyester has set sail and the industry pattern is yet to be reshaped

Tongkun Co. (601233): Polyester has set sail and the industry pattern is yet to be reshaped

The main points of the report have been accumulated for 40 years. The polyester giant has set sail. After nearly 40 years of continuous development, the company started from a township enterprise and has developed into a national leader in polyester filament. Its production and sales have ranked first in China for 18 consecutive years.

Reviewing the development history, the 杭州桑拿 company has gone through 8 stages including transitional development, upgrading, expansion, integration with international standards, counter-cyclical development, listing, and entry into the PTA and refining and chemical fields.

During the “14th Five-Year Plan” period, the company once again ushered in development potential. The integration of Jiangsu Rudong Base Project pushed the company to the next level, and the carrier of the polyester industry has set sail.

Adhering to the “Pagoda-type” strategy, the integrated layout will be implemented. The company adheres to the “Pagoda-type” development strategy. In the competition of the polyester industry, it uses the most advantageous polyester filament as the basis for its development.Transmission of PTA, PX is extended.

By the end of 2018, the company already had a polyester filament production capacity of about 570 tons / year, a PTA capacity of 320 tons / year, and a 20% stake in the Zhejiang Petrochemical Project. The integrated layout of the industrial chain has already taken shape.

In the future, through the completion of the supplementary production capacity plan and the progress of Zhejiang Petrochemical Project, the company’s industrial chain integration advantages will be further highlighted.

There is no need to be pessimistic about the prospects of filament yarns. Waiting for the refined polyester industry to recover from the price drop at the end of last year, the spread has returned to the same period last year.

The unfavorable factors in the industry have all improved month-on-month, and indicators such as downstream weaving operation rate, industry inventory and production-sales ratio have recovered.

In this round of the industry boom cycle, demand is mostly derived from endogenous growth and restructuring; on the supply side, industry leaders have expanded and expanded production to be more orderly.

The downstream weaving industry is shifting inland, further increasing the demand for filament.

The apparent demand for polyester filaments has maintained a positive growth over the past 20 years, and the industry’s prospects do not need to be pessimistic.

Raw material supply was loose, PTA prices fell, and spreads rebounded.

April to May is the peak season for downstream demand, and the PTA spread may fluctuate at a high level.

The PTA operating rate in the past three years has benefited from the downstream boom, which has picked up year by year, due to short-term or overhaul factors.

Social inventory is still relatively low, and it may be further depleted in the short term.

Looking ahead, the PTA industry will usher in a new round of production expansion at the end of the year, and the next two quarters or the PTA industry’s profit comfort period.

The price of PX fluctuated significantly, and the spread may continue to fall.

This phenomenon is mainly caused by the unstable supply of new overseas capacity and the high concentration of domestic production enterprises.

Recently PX inventory has picked up and prices have fallen.

Private petrochemical and other projects are put into production or change the industry structure. It is expected that the new PX capacity will reach 1,100 per year during the year.

Hengli Refining & Chemical has taken the lead in opening up the whole process and reshaping the profit distribution of the industry chain.

Pay close attention to PX maintenance.

Investment suggestion The company is a leading company in polyester filaments, adhering to the “pagoda-type” development strategy and building a giant carrier in the polyester industry.

In the future, through the implementation of private large-scale refining and chemical projects, the company fully benefits from the transformation of the polyester industry chain.

The company’s EPS is expected to be 1 in 2019-2021.

48/2.

26/2.

65 yuan, maintain “Buy” rating.

Risk Warning: 1.

The pace of follow-up refining and production capacity exceeded expectations; 2.

Downstream weaving-garment demand significantly exceeded expectations.