On September 26, Shenma Co., Ltd. issued an announcement to further expand the business scale, accelerate project construction, improve profitability, and improve market competitiveness and industry status for the company’s wholly-owned subsidiary, Henan Pingmei Shenma Nylon Materials (Suiping) Co., Ltd. , the company plans to increase the capital of Henan Pingmei Shenma Nylon Materials (Suiping) Co., Ltd. by 173 million yuan in cash.

This capital increase is mainly used for the construction of the project of Henan Pingmei Shenma Nylon Material (Suiping) Co., Ltd. with an annual output of 30,000 tons of BOPA film. The total investment of the project is 578 million yuan, of which the construction investment is 544 million yuan, and the initial working capital is 18.74 million yuan; the construction period is 18 months.

The report shows that the project plans to build 2 main production lines of asynchronous biaxially oriented BOPA film with a width of 6600mm and its supporting equipment, with a designed production capacity of 30,000 tons, focusing on the production of 10~25μm asynchronous biaxially oriented nylon film products with stable market demand. Mainly used for food, daily chemical,
Medicine and electronic packaging and other fields.

It is reported that the planned total investment of Suiping Nylon Industrial Park is 5 billion yuan. The first batch of BOPA film projects with an annual output of 25,000 tons. The first-phase 10,000-ton production line will start construction in June 2020, and will be put into production in September 2021. Now production has entered High-quality and stable operation, production and sales are booming; the second phase of the 15,000-ton BOPA film production line will start construction on March 25, 2022. Civil engineering, equipment bidding and other work are progressing rapidly, and it is planned to be put into production in October 2023.

It is worth noting that the company has simultaneously launched the second batch of BOPA film projects with an annual output of 30,000 tons while building the second phase of the project.

Shenma Co., Ltd. stated that after the implementation of the project, Pingmei Shenma Nylon Materials (Suiping) Co., Ltd. will achieve an annual production capacity of 55,000 tons of BOPA film, give play to the scale effect, and become the first echelon of domestic BOPA film manufacturing, further enhancing the market. Influence, improve product competitiveness and market voice, and complete the first stage of nylon downstream industrial layout.

According to public information, Shenma Co., Ltd. originated from the Pingdingshan Nylon Cord Fabric Factory in Henan in 1977, and was listed on the Shanghai Stock Exchange in 1994, becoming the first listed company in Henan. The company is mainly engaged in the production and sales of nylon 66 industrial yarn, cord fabric, chips, adipic acid and other products.

Thanks to the opening of the industry boom cycle and the sharp rise in product prices, Shenma will achieve operating income of 13.415 billion yuan in 2021, a year-on-year increase of 50.53%; net profit of 2.144 billion yuan, a year-on-year increase of 478.56%; basic earnings per share of 2.3 yuan, a year-on-year increase 296.55%.

In the first half of 2022, affected by product sales and price changes, the company achieved revenue of 7.6 billion yuan, a year-on-year increase of 20.84%; net profit attributable to the parent was 526 million yuan, a year-on-year decrease of 45.99%; deducted non-net profit of 515 million yuan, a year-on-year decrease 46.08%; basic earnings per share was 0.5 yuan.

However, in general, as of the first half of this year, Shenma’s 100,000-ton PC plant has opened up the process to achieve continuous production, and has completed and put into operation a 130,000-ton bisphenol A project supporting it. The continuous growth of carbonate and bisphenol A market demand has formed a synergistic development with the company’s nylon 66-related business in terms of talent reserve, operation management, and market development.

Nylon 66 products account for about 90% of the company’s overall sales. Last year, the price of nylon 66 sliced ​​products rose rapidly, and the gross profit margin increased by 31.66 percentage points, becoming an important source of profit for the company. Since the beginning of this year, the price of nylon 66 has begun to fall. The price of slices decreased month-on-month.

In this regard, Li Benbin, chairman of Shenma Co., Ltd., and Liu Zhen, secretary of the board of directors, told investors that the current comprehensive operating rate of the company’s PA66 products is about 80%. Running at a high level, the demand for nylon 66 chips has been weak this year, and the price has dropped to a certain extent. It is expected to gradually stabilize in the third quarter. ”

In 2021, Shenma’s performance will hit the best level in history. According to the financial report, in 2021, the company will achieve 13.415 billion yuan, a year-on-year increase of 50.53%; the net profit attributable to the parent is 2.144 billion yuan, a year-on-year increase of 478.56%. In the first quarter of 2022, Shenma achieved operating income of 3.858 billion yuan, a year-on-year increase of 28.72%; realized a net profit attributable to the parent of 368 million yuan, a year-on-year increase of 6.37%.

At the performance meeting, the bisphenol A project and PC project of polycarbonate materials of Shenma Co., Ltd. attracted investors’ attention. It is understood that bisphenol A is mainly used for the production of various polymers such as polycarbonate (PC) and epoxy resin. Material, PC is widely used in building boards, auto parts, aerospace, optical lenses and other fields, and has a tendency to replace the market space of other engineering plastic products. At present, domestic bisphenol A is in short supply and needs to be supplemented by imported resources. Driven by bisphenol A, the PC market was running at a high level last year and the trend of integration with bisphenol A is obvious.

Chairman Li Benbin said: “The bisphenol A project of Polycarbon Materials Company will be completed and put into operation in December 2021. At present, production and sales are booming. The PC project has a designed production capacity of 100,000 tons. It will be completed and put into production in May 2022, and the products are undergoing market certification. The above two After the project is put into production, the polycarbon material company will enter a period of profit return.”