Taixin Material: Maintaining Growth in 2018 and Looking Forward for Aramid Fiber

The company's annual performance report for 2018 shows that in 2018, business income reached 2.176 billion yuan, an increase of 39.94% over the same period of last year; net returns to home reached 162 million yuan, an increase of 61.57% over the same period of last year; basic earnings per share was 0.26 yuan, an increase of 62.50% over the same period of last year. In 2018Q4, business income reached 606 million yuan, an increase of 104.04% year-on-year, an increase of 5.57% year-on-year; net returns to the mother reached 221 million yuan, a decrease of 30.00% year-on-year and a decrease of 48.78% year-on-year.

Spandex industry is still in the process of integration and is expected to recover at the bottom. The differentiation and parking development of the company will usher in new opportunities. At present, China's spandex industry as a whole is excessive. According to the data reported by the company in 2017, the total production capacity of spandex reached 707,000 tons in 2017, while the domestic apparent demand for spandex was only 544,000 tons. In 2018, it is estimated that the domestic production capacity of spandex is 810,000 tons, and the apparent demand is about 600,000 tons. With the continuous promotion of environmental protection and parking policy, some small-scale production capacity is expected to quicken the exit, and the supply and demand of the industry tend to balance. The company's current spandex production capacity is 45,000 tons per year, and the company plans to implement bi-base construction in the next five years. It will levy new land in Yantai Development Zone Chemical Park and build 30,000 tons of differentiated spandex projects with high added value. At the same time, in Ningxia, where the production factor price is relatively low, it will implement low-cost expansion strategy, focus on development, actively participate in industry restructuring, and initially plan to 2020. Spandex production capacity is 60,000 tons per year. Due to the long commissioning period and high cost of the project in 2018, and the high price of polyurethane raw materials, the downstream market demand is reduced, resulting in the loss of the company's polyurethane business in 2018, but the new project is expected to turn into profit after production.

As the leading domestic aramid industry, the company has successfully promoted business transformation, and its performance development has entered the fast lane. The company is the first aramid production enterprise in China, with a capacity of 7,000 tons of interposition aramid and 1,500 tons of counterpart aramid. The aramid production capacity ranks first in the country. The company actively transforms, vigorously develops aramid business, aramid business revenue accounted for the proportion of total revenue increased year by year. In 2018, due to the tight supply and demand of aramid industry, high price operation, the company's aramid sales price continues to rise, production line full load operation, production and sales have achieved substantial growth, profit level has increased significantly year on year, become the company's main business to contribute profits, the company has successfully promoted business transformation performance into the fast lane.

Aramid downstream demand is strong, the future market space is broad. The company's aramid products are mainly used in protective clothing, aerospace, optical fiber reinforcement, automotive industry and other fields. In recent years, the company has gradually expanded its downstream channels and made progress in many fields, such as forest fire protection clothing and soldiers'training clothing. According to the company's announcement, the domestic demand for aramid fiber is about 10,000 tons, the production capacity is only 1,500 tons, and downstream demand will continue to increase, sales prices will continue to rise, aramid market still has broad growth space. The aramid production capacity of company will continue to expand and accelerate the process of localization. At present, domestic demand for aramid still depends on imports. As an important strategic material, the localization of aramid is imminent. Taixin Material released the "Five-Year Development Plan for the Future". During the planning period, it will expand the production capacity of meta-aramid and para-aramid fibers by 12,000 tons, and realize the international market share of meta-aramid and para-aramid fibers by 25% and 10%, and the domestic market share by 60% and 40%. It will become one of the leading aramid enterprises in the world. On July 21, 2018, Taixin Material announcement will start the construction of 3,000 tons/year high-performance para-aramid fiber project in Ningxia. It is expected to be put into trial production in the first quarter of 2020 to continuously accelerate the process of aramid domestication.