Taixin invested 2.65 billion yuan to expand aramid production capacity

On the evening of April 21, Taixin Material released its annual report for 2018 and quarterly report for 2019. Meanwhile, it announced that it would invest 2.65 billion yuan to expand aramid and spandex production capacity.

According to the announcement, in 2018, benefiting from the growth of the two business sectors of meta-aramid and para-aramid, business income reached 2.172 billion yuan, an increase of 39.72% year-on-year, net profit attributable to shareholders of listed companies increased by 56.25% year-on-year, and basic earnings per share increased by 62.50% year-on-year. In the first quarter of 2019, the company realized operating income of 656 million yuan, an increase of 49.86%, net profit of 4097.85 million yuan, an increase of 14.75%.

In the aspect of meta-aramid, due to the tight supply and increasing demand, and driven by the rising cost of raw materials, aramid sales prices continue to rise, the production line runs at full load, and the output and sales have achieved substantial growth. According to market changes, the company timely scheduling production to meet market demand, product structure optimization, to achieve a substantial increase in profits. In the field of para-aramid fiber, over the years, the company has achieved good results in market cultivation. The downstream demand continues to increase, sales prices continue to rise, products continue to be fully produced and sold, military helmet, tactical gloves and other civil-military integration projects have landed, and economic benefits have increased significantly. In the aspect of polyurethane fiber, due to factors such as excess supply and Sino-US trade friction, the market continues to be depressed and product prices continue to decline. At the same time, the industry has entered a period of deep adjustment, some enterprises continue to expand production, and some enterprises go bankrupt, reduce production or stop production. In view of this situation, the company implements the dual-base strategy of Yantai and Ningxia, purchases spandex projects in low-cost areas, actively optimizes the industrial layout, consolidates and improves the competitiveness, and achieves substantial growth in annual output and sales. However, due to the long commissioning cycle and high commissioning cost of the new project, and the high price of polyurethane raw materials, the downstream market demand is not strong, the loss of polyurethane business, reducing the company's performance growth.

In view of the shortage of aramid fiber supply and demand, there is great market space for differentiated products of aramid fiber. The company intends to invest 1.2 billion yuan in Yantai to build 8,000 tons/year high-performance intermediate aramid integrated industrialization project for protection; 450 million yuan in Yantai to build 15,000 tons/year high-efficiency differentiated coarse-denier spandex project; and 1 billion yuan in Ningxia to build 30,000 tons/year green differentiated spandex intelligent manufacturing project.

After reaching the production level of 8000 tons of high-performance intermediate aramid project, it is estimated that the annual sales revenue will reach 879.31 million yuan and the total profit will be 21.15 million yuan. After the completion of 15,000 tons/year high-efficiency differentiated coarse-denier aramid project, 15,000 tons of new coarse-denier aramid production capacity will be added (old and backward production capacity will be gradually closed down and replaced). It is estimated that the annual sales revenue will reach 55,128,000 yuan and the total profit will be 95,615,000 yuan. Tax revenue is 14.342 million yuan; 30,000 tons per year after the completion of the green differentiated polyurethane intelligent manufacturing project, 30,000 tons of new green and differentiated polyurethane production capacity (Yantai Park old and backward production capacity gradually closed down and replaced), it is estimated that the annual average sales revenue will be 10,884.96 million yuan, the total profit will be 17,89,06 million yuan, and tax revenue will be 66,244 million yuan.