Fine chemicals: Focus on the uptrend of the sector and subdivision industry leaders

Profit forecast and valuation: The net profit of the company is expected to be 402/620/764 million yuan from 2019 to 2021, and the current stock price corresponds to 15.3/9.9/8.0 times of PE

3 Additives

Sweetening agent

Sweetener refers to the food additives that give food sweetness, and there are many varieties. Among several sweeteners, acesulfameae and sucralose have higher safety and reasonable price, and their comprehensive properties are better than saccharin, cyclamate and aspartame. Therefore, based on comprehensive considerations, acesulfame, sucralose will gradually replace saccharin, cyclamate and aspartame to become the main demand products in the middle and high-end markets.

Jinhe Industry: The industrial chain continues to increase, and the company's core competitiveness continues to expand

The industrial chain continues to extend, and the company's comprehensive competitiveness is expected to improve: the company recently disclosed a number of proposed construction projects, including 5000 tons of sucralose, 5000 tons of methyl-ethyl maltol, and the annual output of 4,500 tons of Jialet Musk solution, 5000 tons of 2-methylfuran, 3000 tons of 2-methyl-tetrahydrofuran, 1000 tons of ammonium furan and other projects. We believe that the projects disclosed by the company include the consolidation of existing product competitiveness, market-related integration and technology-related integration. The new project will consolidate the market position of the company's existing products, and open up the upstream and downstream industry chain around the bivinyl ketone (acesulfide raw materials) and furfural (methyl-ethyl maltol) raw materials, which is conducive to the horizontal and vertical integration of the industry chain. Form upstream and downstream synergies, reduce the company's comprehensive cost, improve the company's comprehensive competitiveness, and extend the downstream to pharmaceutical solvents, pharmaceutical intermediates, flavors, daily chemicals and other fields with large growth space.

Profit forecast and investment rating: It is expected that the company's net profit from 2019 to 2021 will be 8.26, 10.51 and 1.296 billion yuan respectively, which corresponds to 13.9, 10.9 and 8.8 times PE in 2019, 2020 and 2021, respectively. Relying on its strong process cost reduction and efficiency, scale effect and efficient management system, the company has entered the fine chemical segments such as methyl-ethyl maltol, Acesulfonl and sucralose in the past ten years, and has obtained absolute market share and pricing power with excellent cost control ability and continuous process improvement ability. We are optimistic that the company will achieve horizontal and vertical integration around the existing industrial chain, extend downstream to pharmaceutical solvents, pharmaceutical intermediates, flavors, daily chemicals and other fields, and achieve further extension and expansion of core competitiveness.

Polymer material additive

The domestic market for polymer materials additives is about 15 billion yuan, and the global market is about 45 billion yuan, with an industry growth rate of 4%-6%, and the growth rate of the additive industry is higher than that of the industry. At present, the concentration of the domestic market is low, the industry is in the stage of gradual withdrawal of small production capacity, and the rapid expansion of large-scale enterprises. In the future, companies with competitive advantages will fully benefit from the rapid growth of the industry. Antioxidant, as one of the additives of polymer materials, can effectively reduce the material autoxidation reaction rate and delay aging degradation, and is one of the most commonly used chemical additives in the manufacturing process of various polymer materials. According to the different mechanism of action, antioxidants can be divided into main antioxidants and auxiliary antioxidants. Among them, the main antioxidants include hindered phenolic antioxidants and aromatic amine antioxidants, and the auxiliary antioxidants include phosphite ester antioxidants and sulfur-containing antioxidants. According to the different scope of use of antioxidants can be divided into general antioxidants (GAO) and special antioxidants (SAO) two categories.

Leanlon: Optimistic about the company's capacity release and market share gradually increased, to become one of the world's leading anti-aging agent companies

Strong product competitiveness: 1) The downstream anti-aging agent covers 60% of the world's top 50 chemical enterprises, including PPG and other head coating manufacturers, the main supplier of Wanhua Chemical, product quality has been recognized by large enterprises. 2) Strong R & D genes: Most of the company's management are teachers and professors from the Department of Chemical Engineering of Tianjin University, and they belong to the top 1% of executives in all aspects of ability. The boss has a clear strategy, strong execution and entrepreneurial spirit. 3) High cost performance: the unit price is 5-10% lower than BASF and Japan Songwon and other leading companies, while 48-hour fast response service. 4) Full formulations, can provide solutions: and BASF is the only industry full category supplier, with more than 60 formulations. Products are in short supply and in a period of rapid expansion: Under the release of new capacity in the next three years, production and sales are expected to increase rapidly. In 2018, the company still has more than 20% of sales are outsourced processing, and all the follow-up will be self-sufficient, and the orders are full. In the next 1 year, about 40 downstream customers will become the main suppliers (similar to Wanhua).