Expansion beyond expectations! The global market share of leading MDI companies is nearly 40%!

Wanhua Company’s Ningbo MDI/HDI technological transformation and expansion integration project and the environmental impact assessment information of the 1.8 million tons/year MDI technological transformation project are disclosed. The total investment of the project is 3.711 billion and is expected to be completed in 2023. Among them, the 1.8 million tons/year MDI technical transformation project will expand the production by 600,000 tons; the MDI/HDI technical transformation and expansion integrated project includes the new 280,000 tons/year modified MDI device, 50,000 tons/year HDI device, and 60,000 tons. /Year HDI adduct device, 12+240,000 tons/year hydrogen chloride device, 240,000 tons/year formaldehyde device, supporting transformation of gas generating device and related auxiliary supporting projects.

In addition, Wanhua Chemical (600309) and Shanghai Jiaotong University jointly completed the "High-efficiency Green Asymmetric Catalytic Preparation of L-Menthol Technology" project passed the China Petroleum and Chemical Industry Federation's achievement appraisal.

As a global polyurethane leader, Wanhua has continued to expand production to stabilize its leading position, and at the same time actively deploy petrochemical new materials industry, always maintain rapid development, future performance growth is guaranteed, and maintain a "buy" rating.

MDI production has been expanded significantly, and the company's long-term performance is guaranteed: After the completion of the technological transformation and expansion project, Ningbo's MDI production capacity has increased from 1.2 million tons to 1.8 million tons, exceeding the previously expected 300,000 tons. In addition, Wanhua has 400,000 tons of MDI capacity under construction in Fujian. It is estimated that Wanhua’s global MDI capacity will reach 3.6 million tons in 2023, and its market share will increase by 5 percentage points to 34%. This will further consolidate and enhance the company’s MDI industry Competitive advantages. The price of MDI has rebounded from the bottom in the second half of 20 years. Since the off-season in 21 years, the price has slightly corrected, but it is still at a high level in the past three years. The current aggregate MDI price is 16,800 CNY/ton, yoy+40%, and the pure MDI price is 20,000 yuan. /Ton, yoy+54%. The company's polyurethane sector has strong profitability and high technical barriers; the gradual release of new production capacity will further reduce the company's MDI costs and provide a solid foundation for the company's sustainable development.

Breaking through the technical barriers, the L-menthol demonstration device was completed: The company cooperated with Shanghai Jiaotong University to overcome the complete set of L-menthol production technology with citral as the core raw material, and built and put into production an industrialized demonstration device of 1,000 tons per year. It became a pioneer in the industrialization of synthetic menthol in China and became the fourth company in the world to master the core technology of menthol production. Menthol is widely used in nursing, food, medicine and other industries. The domestic L-menthol has long been dependent on imports. Last year, the domestic imported menthol amounted to 15,652 tons, and the import amount exceeded 250 million US dollars. There is ample room for domestic substitution.

The layout of the whole industry chain highlights the long-term value: In addition to polyurethane, the company has been actively deploying the petrochemical and new material industries and enriching the product line. At present, the production capacity has begun to be gradually released, which has brought the company a substantial increase in revenue. In Q1 of 21, the company's petrochemical series achieved revenue of 12.06 billion yuan, yoy+121%, sales of 2.36 million tons, yoy+84%, and new materials segment achieved revenue of 3.02 billion yuan, yoy+115%, and sales of 164,500 tons. +76%. The company’s three business lines have developed in coordination. The petrochemical sector provides raw materials for new materials and polyurethane sectors, further reducing costs and improving industrial synergy. The company is expected to grow from a global polyurethane leader to a comprehensive chemical leader.

Profit forecast: Maintain the company's profit forecast. It is estimated that the company will have a net net of RMB 162/189/217 billion in 21/22/23, yoy+61%/17%/15%, corresponding to EPS of RMB 5.15/6.02/6.90. The current A share price The corresponding PE is 21/18/16 times. In view of the company's abundant projects under construction and broad growth prospects, future performance growth is guaranteed, and the "buy" rating is maintained.