[Integrated] Taihua New Material Lands Capital Market Nylon Leading Industry Targets Textile Industry

On September 21, 2017, Zhejiang Taihua New Material Co., Ltd. (hereinafter referred to as “Taihua New Material”), a leading manufacturer of Chinese nylon textile fabrics, landed on the Shanghai Stock Exchange. The company's A share capital is 547,600,000 shares. The number of shares listed this time is 67,600,000 shares. The stock is called "Taihua New Material" for short, and the stock code is "603055". The total amount of funds actually raised is 623 million yuan and the issuance price is 9.21 yuan. share. As of September 26, it closed at 17.66 yuan per share.

According to the statistics, Taihua Xincai is mainly engaged in the research and development, production and sales of polyamide filament yarn, nylon fabric and nylon finished fabrics. Now it has grown into a leader in nylon textile fabrics in China.

As one of the important raw materials for textile products, nylons in the field of synthetic fibers are widely used in high-end apparel fabrics and industrial, industrial and other fields. Compared with other chemical fibers, nylon has outstanding characteristics in terms of strength, abrasion resistance, hygroscopicity, etc. Nylon fabrics are more stable and durable than other chemical fiber fabrics and become outdoor, sports, cold, leisure and other apparel areas. Good choice.

Nylon full industrial chain promotes high growth

Taihua New Material Company has been engaged in the nylon weaving business since its establishment on February 21, 2001. In the course of more than ten years of development, in order to continuously improve market competitiveness and overall profitability, the company has gradually expanded its upstream and downstream industrial chain while expanding and strengthening the nylon weaving business. Currently, nylon spinning and weaving have been formed. The complete nylon textile industrial chain, such as dyeing and finishing, is one of the few companies in the whole industry chain of nylon production.

First, a complete industrial chain can reduce the company's operating costs in the field; secondly, a complete industrial chain can enable it to respond quickly to customer needs and meet the different needs of customers; again, a complete industrial chain can ensure the quality of its products; and finally, It is also most important that a complete industrial chain enhances its ability to resist industry risks and profitability.

With the advantages of a complete nylon textile industrial chain composed of nylon filaments, nylon fabrics and nylon finished fabrics over the years, Taihua New Materials not only effectively reduces the impact of upstream petrochemical industry fluctuations on its operating performance, but also keeps the company’s overall profitability stable. At a higher level.

The prospectus shows that during the period from 2014 to 2016 and the first half of 2017 (hereinafter referred to as the “report period”), Taihua New Materials achieved operating revenue of 1.942 billion yuan, 1.897 billion yuan, 2.244 billion yuan, and 1.304 billion yuan, respectively, and net profit for the same period. It was 801 million yuan, 0.41 billion yuan, 228 million yuan and 201 million yuan respectively.

According to the latest performance forecast, this high growth trend is expected to continue. According to the company's operating situation from January to June in 2017, it is expected that the company's operating income for the period from January to September in 2017 will be 1.78 billion yuan to 2.03 billion yuan, compared with the same period of last year. An increase of 10% to 25%, benefiting from the increase in gross profit margin and the decrease in financial expenses during the year, net profit attributable to the parent company after deducting non-recurring profit and loss from January to September 2017 was between RMB 250 million and RMB 275 million. The same period last year increased by 90% to 105%.

According to March 2017, the China Textile Industry Federation issued a certificate: Taihua New Material is a famous textile spinning and weaving, dyeing, and finishing all-chemical-fiber textile company in China. It recognizes that Taihua New Material is a segment of China's nylon fabric. The leading companies have strong capabilities in nylon fiber production, fabric development, production and sales.

In terms of industry status, the company has been rated as the “National Nylon Fabric Development Base” by the China National Textile and Apparel Council for many years. In 2012 and 2015, it was awarded “China Functional Polyamide Silk Fabric Boutique Production Base” by the China Long Filament Weaving Association.

From 2012 to 2015, the company was named “China's Top 500 Textile and Garment Enterprises in Competitiveness” for many years. In 2011-2013, the company ranked No. 3 in the “Top 10 Competitive Enterprises in China's Filament Weaving Industry”. The company is ranked 3rd among the top 50 economic benefits of China's filament yarn weaving industry in 2014; the company ranked 2nd among the top 50 economic benefits of China's filament yarn weaving industry in 2015.

Taihua New Materials adheres to the high-end product line and has formed a high reputation in the industry. It has established a good cooperative relationship with a large number of well-known brand apparel customers, and a high quality customer base has laid a solid foundation for the company's steady development. Through the establishment of an end-user feedback mechanism, the company has promoted R&D to the front end of the industrial chain to conduct joint research and development, which has enhanced the effectiveness of research and development. The company's strong independent research and development design strength has won the trust of domestic and foreign well-known brand customers such as Decathlon, Pathfinder, C&A, H&M, Haishu Home, Jordan, Anta, and US Victor, and established a stable cooperation with them. relationship. After years of development, the company has cultivated a stable customer base and has formed a high reputation among customers. The stable and stable customer resources have also established the foundation for the company's stable development.

R & D technology has obvious advantages

Compared with China Tripod, Mida, Fortune Industrial, and Toray Industries, Taihua New Materials is not dominant at the start, but its follow-up growth capacity is remarkable.

It is reported that Taihua New Materials as the second drafting unit participated in the revision of the "nylon silk fabric" industry standard. It is worth noting that Fuhua Weaving, a subsidiary of the company, was the sampling unit of the “China Shengze Silk Market Chemical Fiber Index”. As the first drafting unit, it drafted the “nylon and cotton intertwined printing and dyeing cloth” industry standards, and for many consecutive years with the China Textile Information Center. The National Textile Product Development Center co-organized the "Plastic Fabrics Trends Announcement" as one of the publishing units of China's "chemical fiber fabric trends."

In addition, as of June 30, 2017, Taihua Xincai and its holding subsidiaries had 34 invention patents, 94 utility model patents, and 1 exterior design patent. Not only has it been rated as “National Nylon Fabric Development Base” by the China National Textile and Apparel Council for many years in a row. In April 2012 and April 2015, the company was also awarded “China Functional Nylon Silk Fabric Fine Product Production Base” by the China Long Filament Weaving Association. , And as the second drafting unit to participate in the revision of the "nylon silk fabric" industry standards.

According to Shen Weifeng, general manager of Taihua Xincai, the company has gradually formed technical advantages in the industry through its R&D strength and cooperation with external parties, and has basically established a technological innovation system integrating technological research and production, learning, and research, so that the company’s technological level in the country Maintain the leading level in the same industry. At present, the company has formed core technologies with independent intellectual property rights in all aspects of spinning, weaving, dyeing and finishing, and has obvious technical advantages compared with other companies in the same industry.

The prospectus shows that in the past three years, the investment in research and development of Taihua New Materials has increased year by year. The expenses are 36,865,000 yuan, 49,294,200 yuan and 56,626,600 yuan. The listed Taihua New Material also plans to build a new fiber and fabric technology R&D center. It is expected that there will be Helps to enhance the diversity and diversity of product categories and enhance the competitiveness of products.

Shi Qingdao, chairman of Taihua New Materials, stated that: Taihua's new material product development plan is to grasp the important development trends of high-end, multi-functional, low-carbon carbide and other nylon products, and develop new product series. The specific research and development contents include: (1) nylon spinning In terms of silk, we have strengthened the research, development, and production of functional fiber products that are dye-free, environment-friendly, high-strength, wear-resistant, permanent UV-resistant, and high-simulation composite. (2) In the aspect of nylon fabrics, the development and production of differentiated products such as sorbable fabrics, high-strength fabrics, and ultra-fine high-density fabrics have been strengthened. (3) In the aspect of nylon finished fabrics, the development and production of high-end products such as eco-composite fabrics, non-fluorine-resistant and washable waterproof fabrics, antibacterial medical fabrics, and high-absorbent skin-friendly fabrics have been strengthened.

In the future, Taihua New Materials will continue to innovate its R&D model, strengthen the reverse engineering analysis of the industrial chain in the early stages of R&D projects, increase the market-specific and industrialized rate, and commercialization rate of new product research and development, make full use of the company’s complete industrial chain advantage, and upgrade the company’s nylon The entire industry chain of spinning, grey weaving, dyeing, and finishing processes is capable of collaborative innovation and forms a system integration R&D and innovation system. At the same time, the Company has increased the company's R&D center's resource input every year to provide guarantees for the company to achieve its goal of R&D, innovation and development.

Shi Qingdao also pointed out that after many years of steady development, Taihua New Materials has acquired the foundation for implementing external mergers and acquisitions in terms of technical strength, operation and management. Taking this release as a turning point, under the premise of meeting various resources required for the rapid development of production and operation, according to the development strategy and market competition, the rational distribution of production bases and the advantages of the industrial chain will be gradually achieved through mergers and acquisitions. .

The industry has a bright future

Industry policy support, strong downstream consumer demand, cancellation of export quotas for textiles, and successful bid for the Olympic Winter Games in 2022 have brought about huge market opportunities for China's nylon industry. All bring new prospects for Taihua New Materials to access the capital market.

The prospectus shows that funds raised by this issue of Taihua Xincai will be used for “the annual dyeing of 80 million meters of high-grade differential functional nylon fabric expansion project” and “the year after processing and processing 34.5 million meters of high-grade special functional fabric expansion project” and "Three new projects of fiber and fabric technology research and development center".

The company said that after the completion of the project, it will further enhance the company's vertical industry chain integration and efficient operation capabilities, improve product high value-added, so as to continuously enhance the company's product market competitiveness and market share, and enhance its ability to resist risks.

It is reported that Taihua Xincai has always focused on maintaining the exchange and cooperation with the international industry or professional organizations in the development of new products and technological innovations. The company is often associated with the United States DuPont, Germany Dysta, the United States Huntsman, Germany BASF, Japan TMT Experts from Tsudakoma, Japan's Daikin, Germany's Barmag, Germany's Gatefoss, and the United States 3M conducted technical exchanges and cooperated with DuPont, BASF, and INVISTA to develop high-tech products and international popular products.

Shi Qingdao also stated that Taihua New Materials will firmly seize the opportunity of the vigorous development of the textile and apparel industry, and firmly grasp the characteristics, development trend of the nylon sub-sector industry, and firmly grasp the differences, functionalization, health, and fashion of nylon products. The development direction and goal, with healthy products guiding the road of industrial environmental protection, using innovative technology to lead the industry development direction, brand service to achieve industry value model, and strive to become the world leader in polyamide fabrics.

Recently, at the 2017 China Textile Innovation Annual Product Summit, Chen Baojian, chief engineer of the National Textile Product Development Center, said that “in the future, nylon, home textile, industrial and military industries will be the three major areas of development. There is a lot of space for use; Nylon product development will make breakthroughs in differentiated products, as well as recycled fibers, bio-based fibers, and colored liquid dyes. It is hoped that upstream and downstream companies can collaborate on innovation and based on market demand, create synergies and generate benefits.”

According to the "China Textile Industry Development Report," the average annual per capita fiber consumption in developed countries is generally in the range of 20-30 kilograms, while the per capita annual fiber consumption in developing countries is still less than 10 kilograms. As the income level of residents continues to increase and living conditions gradually improve, fiber consumption will continue to grow.

In September 2016, the Ministry of Industry and Information Technology released the “Thirteenth Five-year Development Plan for the textile industry”. The average annual growth rate of the industrial added value of textile enterprises above designated size will remain at 6%-7%; by 2020, a batch of technologies will be built. With advanced management, sound quality system, prominent leading products, and strong brand influence, the textile industry's new industrialization industrial demonstration base has formed 3-5 world-class textile industrial clusters with a production value of 100 billion yuan.

In the future, as China’s economy continues to grow rapidly, people’s consumption concepts will be constantly updated, consumption levels will continue to rise, domestic consumer demand will continue to escalate, and the demand for chemical fiber textiles, especially high-end products, will continue to expand, and the demand for per capita fiber consumption will increase. Textiles provide a vast market space.