As the leader in polyester filament, Tongkun Co., Ltd. (601233) once again expanded its production. The company signed an investment agreement with the Guleigang Economic Development Zone in Zhangzhou, Fujian to produce 2 million tons of polyester fiber per year, and the total investment will reach 15 billion yuan. A reporter from Securities Times·e Company noted that the production capacity invested and constructed this time is about 30% of the company’s polyester fiber production capacity last year.
Luozi Fujian Gulei
The announcement on June 22 showed that, Tongkun Co., Ltd. and Fujian Fuhua Gulei Petrochemical Co., Ltd. (referred to as “Fuhua Gulei”) jointly signed the “Investment Agreement for an Annual Production of 2 Million Tons Polyester Fiber Project” with the Management Committee of Gulei Port Economic Development Zone, Zhangzhou, Fujian. The project plans to acquire approximately 1,800 acres of newly planned land for the main factory area, forming an annual production capacity of 2 million tons of polyester fiber, and building 500 texturing machines and 2,000 loom projects.
According to reports, the Gulei Port Economic Development Zone is located on the Gulei Peninsula in Zhangzhou City. It is located in the country’s third largest Taiwanese investment concentration area and is one of the seven major petrochemical industry bases in the country recognized by the state. It is also the only Taiwan petrochemical industrial park in the country confirmed by the National Development and Reform Commission. It has been selected as one of the top 30 chemical industrial parks in China for several consecutive years. The local refining capacity planning ranks first among the seven major petrochemical bases in the country.
Tongkun shares pointed out that this project has changed the traditional polyester spinning production method, realized the transformation and upgrading of integrated production of polyester spinning, texturing and weaving, and integrated resources, the competitive advantage is obvious; at the same time, the project adopts new intelligent manufacturing models such as fully automatic packaging, automated three-dimensional warehouses, and Internet of Things technology; it has abundant sources of raw materials and can be easily purchased in both international and domestic markets. Among them, the main raw materials for production, PTA and ethylene glycol, are guaranteed by relevant units in the Gulei Economic and Technological Development Zone, making nearby procurement more competitive. In addition, the company has wholly-owned subsidiaries Jiaxing Petrochemical and Jiangsu Jiatong Energy, so the supply of PTA is more guaranteed.
From the perspective of market demand, although the modern textile and garment industry is one of the leading industries in Fujian Province, the scale of the upstream clothing market in Fujian is currently small, and most fiber raw materials and cloth come from Jiangsu and Zhejiang. If you buy in one area, the gap will be larger. The products of this investment project have high added value. The implementation of the project will help meet the needs of downstream textile and garment enterprises for differentiated and functional fiber raw materials. The implementation of the project will enhance the competitiveness of the new materials industry in Gulei Economic Development Zone and meet the needs of Surrounding areas such as Zhangzhou, Quanzhou Jinjiang, and Fuzhou Changle have a large demand for chemical fiber raw materials, and they can also radiate to the Guangdong market.
Expanding production again
The reporter noticed that in December last year, Tongkun Co., Ltd. also signed an investment agreement of 15 billion yuan, and signed an investment agreement with the Shuyang Economic and Technological Development Zone Management Committee for projects with an annual output of 2.4 million tons of filament (short fiber). The corresponding filament production capacity invested accounts for approximately 10% of the company’s investment. The production capacity that year was 32%; the polyester fiber project invested this time also accounted for nearly 30% of the company’s production capacity last year.
As for the source of funds for large investments, Tongkun shares stated that the company will use its own funds and fixed asset loans from the project company’s bank based on its own financial situation and the actual situation at the time of project investment. Or resolve it through other refinancing methods.
As of the first quarter of this year, Tongkun’s total assets were 50.388 billion yuan, with an asset-liability ratio of 43.16% (the above data are unaudited). In the first quarter of 2020 and 2021, the company achieved net profits attributable to shareholders of the parent company of 2.847 billion yuan and 1.717 billion yuan respectively. At present, the company’s operating conditions are excellent and its business scale is constantly expanding. The income accumulated through operations can provide necessary funds for foreign investment.
Considering that this polyester fiber project is far away from the current location of Tongkun Co., Ltd. and the local industrial chain development advantages, Tongkun Co., Ltd. will invest with Fuhua Gulei Implementation of the joint venture established. In addition, the project partner Fuhua Gulei is also relatively strong and can provide support.
In terms of refinancing, the non-public issuance project of Tongkun shares has been reviewed and approved by the China Securities Regulatory Commission. The private placement plan plans to raise 1.97 billion yuan to invest in the cogeneration expansion project of Yangkou Port Economic Development Zone in Jiangsu Province and Jiaxing Thermal Power with an annual output of 150,000 tons of surfactants.
Leading companies in capacity aggregation
From the perspective of the industry situation, at present Domestic civilian polyester filament is a fully competitive industry. In order to enhance operational stability and obtain cost advantages, leading polyester filament companies have extended the industrial chain upstream and downstream, starting from crude oil refining to create “aromatics-PTA-polyester- A complete industrial chain of “civilian silk – weaving – dyeing and finishing”; at the same time, as the demand for polyester filament products develops in the direction of diversification and high quality, seize the opportunity of market demand adjustment, introduce advanced production equipment, improve production intelligence, and become an enterprise Important choice. In 2020, the national polyester filament output will be approximately 39 million tons. The new production capacity in the industry will basically come from large leading companies. The aggregate production capacity concentration rate of the top six companies in the industry is close to 60%.
According to the annual report, Tongkun Co., Ltd. has a PTA production capacity of 4.2 million tons/year, a polyester polymerization production capacity of approximately 6.9 million tons/year, and a polyester filament production capacity of approximately 7.4 million tons/year. In 2016, it has ranked first in output and sales in the domestic market for 20 consecutive years. The domestic market share of polyester filament yarn is nearly 20%, and the global share exceeds 12%.
The polyester filament market is temporarily stable a few days ago. There are concentrated discount promotions in the middle of the week. Partial production and sales of polyester filament are increasing. However, downstream users have sufficient raw material stocks. In the short term, inquiry willingness is not strong. It is expected that in the short term The domestic polyester filament market was mainly volatile and consolidated. mechanismIt is expected that polyester filament yarn will enter the active inventory replenishment stage in the second half of 2021, and both volume and price can be expected to rise.
In terms of market performance, the chemical fiber sector benefited from the concentrated explosion of textile orders and continued to strengthen last year. Tongkun shares continued to rise last year, reaching the highest share price in February this year. 95.9 yuan. Subsequently, the stock price adjusted. As of the latest closing, it has fallen by about 27% to close at 21.03 yuan per share. However, institutional funds were optimistic in the first quarter. Mainland China increased its holdings by 3.73%, and Qianhai Life Insurance became the eighth largest shareholder. </p
