Trainee reporter Niu Siruo.
On January 10, Xinfengming announced that its wholly-owned subsidiary, Zhonghong New Materials, plans to invest in the construction of new material projects with a total investment of about 20 billion yuan.
As of January 10**, Xinfengming fell 141% at 13 per share99 yuan, with a market value of 21.4 billion yuan.
There are risks associated with funding
On January 10, Xinfengming announced that its wholly-owned subsidiary, Zhonghong New Materials, intends to invest in the construction of new material projects with its own funds or self-raised funds, with a total investment of about 20 billion yuan and an annual output of 2.5 million tons of differentiated polyester fiber materials and 100,000 tons of polyester film materials.
Xin Fengming said that the investment is to further strengthen the industrial cluster and production strength of the Zhouquan base, further adjust the product structure, optimize the competitiveness of products, and improve the company's profitability.
It is worth noting that the amount of this investment is close to the current total market value of 21.4 billion yuan of Xinfengming.
And according to Xinfengming's financial report, as of the third quarter of 2023, Xinfengming's monetary funds are 1159.1 billion yuan, but short-term borrowings of 1491.8 billion yuan, long-term borrowings of 811.4 billion yuan, Xinfengming's asset-liability ratio is 6660%。
In terms of performance, Xinfengming will achieve a turnaround in 2023, which is the first positive growth in net profit attributable to the parent company since 2022. According to the third quarterly report, Xinfengming achieved revenue of 1601.7 billion yuan, a year-on-year increase of 1257%；The net profit attributable to the parent company was 40.7 billion yuan, a year-on-year increase of 47196%。
Xin Fengming said that the investment amount of this project is large, although the company has a certain financial strength, and the bank credit is good, but there may still be a risk that the funds are not in place, which will affect the construction progress of the project.
Twice invested in production expansion
Previously, in response to the funding problem of the PTA project with an annual output of 5.4 million tons, Xinfengming launched a private placement of 1 billion yuan in January 2023. However, in October 2023, Xinfengming announced that it would terminate the issuance of ** to specific objects and withdraw the proposal of the application documents, and withdrew the application documents for the private placement, and the 1 billion financing plan was stranded, but Xinfengming said that it would be put into operation as planned.
At the same time, another major investment is underway.
In June 2023, Xinfengming announced that it would plan to launch the Taikun Petrochemical (Indonesia) ** Indonesia North Canada Refining and Chemical Integration Project with Tongkun Co., Ltd., with a total investment of 862.4 billion US dollars, Xin Fengming actually holds 441%。The project includes oil refining and aromatics process units, ethylene and downstream units and related supporting facilities, with a project scale of 16 million tons per year of oil refining, paraxylene (PX) production capacity of 5.2 million tons per year, and ethylene 800,000 tons per year.
Xin Fengming said that the competition in the industry is fierce, which is directly reflected in the fact that the first echelon enterprises in the industry have increased production capacity through new construction or mergers, and extended to PTA, PX, etc. upstream to ensure raw materials.
While continuously laying out the upstream industrial chain, Xinfengming once again spent about 20 billion yuan to increase the production capacity of new materials. Xin Fengming said that at the current stage of improving the marginal bottom of supply and demand in the polyester fiber industry, the company will focus on optimizing the product structure and increasing the comprehensive competitiveness of products.
According to the research and analysis of Yinhe**, on the basis of the company's existing "PTA-polyester-spinning-texturing" business pattern, the project plans to further extend upstream, improve the production capacity of raw material PX and acetic acid, and enter the refining and chemical market, which will help deepen the company's vertical integration layout.
According to the research and analysis of the Great Wall, leading enterprises have gradually improved the layout of the whole polyester and polyester industry chain, the integrated cost advantage has become increasingly prominent, the competitive advantage has been consolidated, and the industry concentration has continued to increase, and the leading enterprises are expected to benefit from the change in the industry pattern.
Edit: Captain's Review: Muyu.