Investment Points
, Yuanli Convertible Bonds (rated AA-, issuance size 900 million yuan), the terms have been revised downward to "15/30, 85%", the debt bottom protection is weak, and it is expected to be listed at the current parity price The conversion premium rate obtained on the first day was in the range of 20%-24%, and the price was 122-126 yuan. assumes that the allotment of 45% of Yuanli convertible bonds will leave the market size of 495 million yuan, and the estimated winning rate is 0.0055%. There is no objection to new participation. As the leading domestic company in the field of wood activated carbon, the company has obvious advantages in production, sales and cost. With the construction of the company's new industrial park, the company will further expand its competitive advantages and promote market share. At the same time, Yuanhe Chemical has added advanced sodium silicate production capacity to broaden the company's profit sources. Future performance is expected to further improve and consolidate the company's leading position.
and companies are the largest wood-based activated carbon manufacturers in my country. From the perspective of 's business structure, wood activated carbon is the main source of revenue, contributing 867 million yuan in 2020, accounting for 76.36% of the company's total revenue. From 2016 to 2020, the compound growth rates of wood activated carbon, silica and businesses were 12.09% and 15.30%. In 2019, the company sold 100% of the shares of Guangzhou Yuanli Interactive Entertainment Network Technology Co., Ltd. and divested all of its gaming business. On the industry side, wood activated carbon is used as an industrial adsorbent, and its application areas include sugar production, MSG, food, beverages, medicine, water treatment, air pollution purification, chemical industry, national defense, agriculture, etc. Industry barriers include qualification barriers, raw material supply barriers, technology and talent barriers
, production and sales scale and process, cost advantages, and rapid expansion of production capacity. The production and sales scale of Company's wooden activated carbon has grown from 500 tons when the factory was founded to nearly 100,000 tons in 2020. It has ranked first in the country in terms of output, sales volume, and export volume for many years. The application of technologies such as the "new activated carbon acid recovery process" developed by the company has reduced the company's consumption of phosphoric acid to 0.15 tons for producing 1 ton of finished carbon (compared to 0.25~0.35 tons for its peers), effectively reducing phosphoric acid consumption. In addition, the circular economy industrial park improves production efficiency and reduces production costs. More than 90% of wastewater can be recycled, basically achieving zero discharge. Furthermore, the holding subsidiary Yuanhe Chemical has joined forces with Germany's Evonik to expand the sodium silicate industry. green tires provide new opportunities
, 021H1. The company achieved revenue/net profit attributable to the parent company of 692 million yuan/56 million yuan, and operating income/attributable to the parent company of 692 million yuan/56 million yuan. Net profit of the parent company increased by 31.17%/-3.94% year-on-year. During the reporting period, the company's gross profit margin was 21.22%, a year-on-year decrease of 6.41 percentage points. In terms of expenses, the company’s expense rate during the period was 13.83%, with a year-on-year change of -2.66pct. The company's net profit margin was 8.14%, a year-on-year decrease of 2.97pct. 021H1 The company achieved revenue/net profit attributable to the parent company of 692 million yuan/56 million yuan, and operating income/net profit attributable to the parent company increased by 31.17%/-3.94% year-on-year. During the reporting period, the company's gross profit margin was 21.22%, a year-on-year decrease of 6.41 percentage points. In terms of expenses, the company’s expense ratio during the period was 13.83%, a year-on-year decrease of 2.66pct. The company's net profit margin was 8.14%, a year-on-year decrease of 2.97pct.
Risk warning: The progress of production capacity construction is not as good as expected, and the demand is not as good as expected.
Report text
html On September 2, Yuanli Shares announced that it will issue 900 million yuan of convertible bonds online on September 6, 2021. This time it will raise funds Mainly applied to Nanping Yuanli Environmental Protection Activated Carbon Construction Project Yuanli Convertible Bonds New Analysis and Investment Suggestions
The downward revision terms are average, and the debt bottom protection is weak.
The downward revision terms of Yuanli convertible bonds are general, which is "15/30, 85%", and the redemption terms are nothing special; a conditional sell-back term is set, which is "30/30, 70%". Calculated based on ChinaBond (September 2, 2021) 6-year AA-corporate bond valuation of 6.73%, and redeemed at 105 yuan at maturity, its pure bond value is approximately 74.51 yuan, and the YTM corresponding to the face value is 1.55%. Bottom protection is weak. If all convertible bonds are converted into shares at a conversion price of 17.61 yuan, the dilution rate for the total share capital (97.74% of the circulating plate quantity) will be 1.42%.
Looking at the static, the first day listing price is expected to be 122-126 yuan.
As of the closing price on September 2, the corresponding price of Yuanli Convertible Bonds was 101.82 yuan. Yuanli Co., Ltd. is a leading domestic wood-based activated carbon company.Among those currently listed, Yuanli convertible bonds may be positioned slightly higher than Zhengdan convertible bonds (rated AA-, balance 320 million yuan, parity price of 103.60 yuan corresponding to convertible bond price of 121.65 yuan), and lower than Midland convertible bonds (rated AA- , the balance is 207 million yuan, the parity price is 102.11 yuan, corresponding to the convertible bond price is 127.50 yuan).
Looking at the static, it is expected that the conversion premium rate obtained by Yuanli Convertible Bonds on the first day of listing under the current parity price will be in the range of 20%-24%, and the price will be 122-126 yuan.
The estimated winning rate is 0.0055%. According to the latest data, the top two shareholders of Yuanli Shares are Wang Yanan and Fujian Sanan Group Co., Ltd. . The two hold 19.58%/7.11% of the shares respectively. They are the top ten shareholders of the company. The total shareholding is 58.33%, and the company’s ownership structure is concentrated. Under the assumption of 45% placement, the size of Yuanli convertible bonds left to the market is 495 million yuan.
Yuanli Convertible Bonds are only available for online issuance. The recently issued Tianhe Convertible Bonds (AA, size 5.252 billion yuan) and Bert Convertible Bonds (AA, size 902 million yuan) were purchased online by approximately 9.8/8.7 million households. Assuming that 9 million households subscribed for Yuanli Convertible Bonds online, the winning rate would be around 0.0055% based on full payment.
has no objection to the new participation. As a leading domestic wooden activated carbon enterprise, the company has obvious advantages in production, sales and cost. With the construction of the company's new industrial park, the company will further expand its competitive advantages and promote market share. At the same time, Yuanhe Chemical has added advanced sodium silicate production capacity to broaden the company's profit sources. Its future performance is expected to further improve and consolidate the company's leading position.
Fundamental Analysis of Yuanli Convertible Bonds
The largest domestic wooden activated carbon faucet with the highest technical level and the strongest ability of independent innovation
The company is the largest wooden activated carbon manufacturer in my country. company belongs to the forestry chemicals manufacturing industry. Since its establishment, it has been focusing on the research, development, production and sales of wood-based activated carbon and silica (sodium silicate). The company's current products are mainly divided into five series, namely activated carbon for sugar, MSG, food, water treatment, chemical industry, etc., which are used for decolorization, deodorization, impurity removal, purification, refining, etc. In recent years, as people pay more and more attention to life, health and environmental protection, the company has successively developed supercapacitor activated carbon, indoor air purification activated carbon, special carbon for organic solvent recovery, special carbon for natural gas storage, special carbon for oil and gas recovery, and special particle size interval powder. New products such as activated carbon, high adsorption capacity phosphate carbon for special fields, special carbon for acetone adsorption, highly dispersible granular carbon for liquid phase, and catalyst carrier carbon have broadened the application fields of activated carbon.
Activated carbon products are the company's main source of performance. From the perspective of 's business structure, wood activated carbon is the main source of revenue, contributing 867 million yuan in 2020, accounting for 76.36% of the company's total revenue. From 2016 to 2020, the compound growth rates of wood activated carbon and white carbon black business were 12.09% and 15.30%. In 2019, the company sold 100% of the shares of Guangzhou Yuanli Interactive Entertainment Network Technology Co., Ltd. and divested all of its gaming business.
Wooden activated carbon industry: rich downstream application fields and high industry barriers
Wooden activated carbon upstream includes forest products industry, chemical industry and machinery industry. forest products industry micro-wood activated carbon provides the main raw materials of forest products "three residues" (i.e., forestry logging, timber making and processing residues, including bark, leaves, sawdust, shavings, etc.), and the chemical industry provides activators such as phosphoric acid , providing corresponding equipment for the production of micro-activated carbon in the mechanical industry. The stable supply of the "three residues" of forest products is the key to achieving continuous and stable production of wood-based activated carbon. The quality of wood will also affect the quality of wood-based activated carbon products.
has a wide range of downstream applications. As an industrial adsorbent, wood activated carbon has a wide range of applications, including sugar production, monosodium glutamate, food, beverages, medicine, water treatment, air pollution purification, chemical industry, national defense, agriculture and other aspects of production and life. With the improvement of living standards and the enhancement of environmental protection awareness, the application fields are still expanding, and the market prospects are very broad.
industry barriers are high.After years of development, the activated carbon industry has formed high industry barriers, mainly including qualification barriers : In addition to being used in emerging application fields such as oil and gas recovery, wood-based activated carbon is mainly used in the edible and medicinal industries. These industries involve Most of them have strict industry access qualifications for food hygiene or life health; raw material supply barriers : wood quality has a greater impact on the quality of activated carbon products. Wooden activated carbon production companies need to establish a group of stable suppliers through long-term procurement accumulation. and a set of raw material supply systems suitable for their own development. For newly-entered companies, it is difficult to break the current supply pattern and establish their own supply systems; technology and talent barriers : wood activated carbon in production , refining, and R&D processes involve a wide range of technical fields. To produce high-quality, low-cost, and diverse activated carbon products and gain an advantage in the increasingly fierce market competition, activated carbon companies must develop and master a series of core technologies. These technologies Mastering requires activated carbon production enterprises to cultivate and possess a group of experienced professionals, and the accumulation of technology and talent reserves usually take a long time
Outstanding advantages in production and sales scale, technology, and cost, rapid production capacity
The company ranks first in the country in terms of activated carbon production and sales . The production and sales scale of Company's wooden activated carbon has grown from 500 tons when the factory was founded to nearly 100,000 tons in 2020. It has ranked first in the country in terms of output, sales volume, and export volume for many years. The company currently has 6 activated carbon production and operation bases in Nanping, Fujian, Putian, Yushan, Jiangxi, Manzhouli, Inner Mongolia, and Shanghai. The radiation radius covers the most important forest production areas, wood processing areas and sales markets in the country. The business base layout Reasonable and unmatched by peers.
company has industry-leading activated carbon production technology. The application of the "new activated carbon acid recovery process" and "exhaust gas quenching and tempering treatment equipment" and "completely non-metallic electrostatic precipitator " independently developed by company has reduced the company's phosphoric acid consumption for producing 1 ton of finished carbon to 0.15 tons. The consumption of other domestic enterprises in the same industry is between 0.25 and 0.35 tons, which effectively reduces the consumption of phosphoric acid. At the same time, the company's "new technology for large-scale clean production of phosphoric acid activated carbon" fully recovers the heat energy generated in the production process of physical activated carbon for chemical activated carbon production, replacing the fuel heating mode, thereby significantly reducing the overall energy consumption of the product. In addition, the company's "Physical and Chemical Integrated Production Line Project" realizes large-scale, continuous and clean production of activated carbon, saving about 900 yuan per ton of carbon. The comprehensive cost advantage of the company's products is very obvious. In the future, as the company's advanced technology continues to be applied and production capacity continues to expand, the company's cost advantage will be further reflected.
Circular Economy Industrial Park improves production efficiency and reduces production costs. Yuanli has joined forces with Sanyuan and other companies to build a bamboo industry circular economy park. The four major industrial sectors of bamboo, charcoal, silicon and clean energy are interlocked to form a complete green industry chain. The upstream of the industrial chain is the bamboo industry, which mainly produces building boards, furniture, handicrafts, etc. In the production process of bamboo products, more than 60% of the scraps will be turned into treasure and become raw materials for activated carbon. The downstream industry chain is the silicon industry and clean energy industry. The industrial park recycles clean energy (wood gas, steam) generated in the production process of activated carbon and uses it for the silicon industry. The hot water generated during the production process of the silicon industry is used for the bamboo industry, and the bamboo chips left behind by the bamboo industry are used for charcoal. Industrial use, link by link, to achieve recycling. In addition, the company uses sodium sulfate electrolysis recycling technology to produce sulfuric acid, caustic soda and industrial water through electrolysis of sodium sulfate wastewater generated in the silicon industry. Sulfuric acid and industrial water are used in the production of silica gel and silica, caustic soda is used in the production of water glass, and water glass is the raw material for the production of silica gel and silica. Therefore, more than 90% of the wastewater can be recycled, basically achieving zero discharge.
joins forces with Germany's Evonik to expand the sodium silicate industry, and green tires provide new opportunities.Yuanhe Chemical, a subsidiary of Company, is the world's leading specialty chemical company, the only partner of German Evonik Industries in the field of precipitated silica (including matting agents and silica gel) in mainland China. The two parties jointly established Evonik Chemical. ("EWS"), all the sodium silicate required for its production of silica is provided by Yuanhe Chemical. At present, the world's mainstream automobile and tire manufacturers have accelerated the implementation of green tires. Precipitated silica, as the core filler of green tires, will continue to make profits. EWS is one of the few suppliers in the domestic silica industry that has obtained tire certification, and will gain development opportunities amid the rapid growth of green tires.
The company's activated carbon and sodium silicate business has grown steadily, and the game business has affected the company's revenue in 2020.
The company's operating income/net profit attributable to the parent company for the whole year of 2020 was 1.136/216 million yuan respectively, and the year-on-year change in operating income/net profit attributable to the parent company was -11.36 %/ 135.29%. During the reporting period, the company's gross profit margin was 24.52%, basically the same as the same period last year. The decrease in gross profit margin was mainly due to the company's divestment of its online gaming business. In terms of products, the company's activated carbon and sodium silicate sales increased by 15.91%/6.51% respectively, and the gross profit margin was 28.13%/12.83% respectively, with a year-on-year change of +2.73pct/+2.72pct. In terms of expenses, the company’s expense rate during the period was 13.54%, a year-on-year decrease of 8.02pct. Sales/management/finance/R&D expense ratios were 2.67%/11.11%/-0.24%/2.30% respectively, with year-on-year changes of -3.47pct/-3.63pct/-0.92pct/-4.76pct. The company's net profit margin was 11.09%, a year-on-year increase of 6.91pct.
2021H1 The company achieved revenue/net profit attributable to its parent company of 692 million yuan/56 million yuan, and operating income/net profit attributable to its parent company changed by 31.17%/-3.94% year-on-year. In terms of products, the production and sales of wood activated carbon continued to maintain steady growth, achieving sales revenue of 487 million yuan, a year-on-year increase of 16.23%; the sodium silicate business has a good momentum of development, achieving sales revenue of 200 million yuan, a year-on-year increase of 83.49%. During the reporting period, the company's gross profit margin was 21.22%, a year-on-year decrease of 6.41 percentage points. In terms of expenses, the company’s expense rate during the period was 13.83%, a year-on-year decrease of 2.66pct. Sales/management/finance/R&D expense ratios were 2.52%/12.31%/-1.00%/3.16% respectively, with year-on-year changes of -4.15pct/+3.08pct/-1.59pct/+0.74pct. The company's net profit margin was 8.14%, a year-on-year decrease of 2.97pct. Looking forward,
, as a leading domestic wooden activated carbon company, has obvious advantages in production, sales and cost. With the construction of the company's new industrial park, the company will further expand its competitive advantages and promote market share. At the same time, Yuanhe Chemical has added advanced sodium silicate production capacity to broaden the company's profit sources. Its future performance is expected to further improve and consolidate the company's leading position.
valuation is at the bottom since 2020
As of the closing price on September 2, Yuanli Shares’ PE (TTM) was 45 times and PB (LF) was 3.21 times. From a vertical perspective, the company’s valuation is at the bottom since 2019.
According to Wind's consensus forecast, the company's net profit in 2021/2022/2023 will be 1.61/2.01/239 million yuan respectively, calculated based on the closing price on September 2, PE34.87/27.87/23.41 times.
Risk warning: The progress of production capacity construction is less than expected and the demand is less than expected.
Analyst statement
Note: The report in this article is based on a publicly released research report by the Industrial Securities Institute of Economics and Finance. Please see the full report for specific report content and related risk warnings.
Securities Research Report: "[Industrial Securities Fixed Income. Convertible Bonds] Expanding Wooden Activated Carbon Leader - Yuanli Convertible Bonds Investment Value Analysis"
External Release Time: September 3, 2021
Report Issuing Agency: Industrial Securities Co., Ltd. The company (has obtained the securities investment consulting business qualification licensed by China Securities Regulatory Commission )
Analyst for this report:
Huang Weiping SAC Practice Certificate Number: S0190514080003
Zuo Dayong SAC Practice Certificate Number: S0190516070005
Cai Kun SAC Practice Certificate Number: S0190520080005
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