Huachang Chemical Industry is expected to usher in

Huachang Chemical Industry Co., Ltd. is expected to usher in a performance decline when the two raised investment projects are put into operation in 2010.

Huachang Chemical Industry's main businesses are urea, compound fertilizer, soda ash, ammonium chloride and methanol. However, affected by the economic downturn and lower product prices, the company lost a total of 88.8137 million yuan in the first three quarters of this year, and is expected to lose 100 million to 110 million yuan in the whole year

however, recently, many insiders pointed out that the current industry in which the company is located has been "unbearable", and the prices of the company's main products have begun to rise, especially with the power structure adjustment national debt project and the 1000 ton/year solid sodium borohydride fund-raising project will be put into operation in 2010, and the company's performance next year is expected to usher in an inflection point

the cost is expected to be significantly reduced.

public information shows that the company is located in Zhangjiagang, Jiangsu Province. In the regional market of Jiangsu, Zhejiang and Shanghai, the production scale of nitrogen fertilizer and soda ash of the company is in the leading position. At present, the company has formed a production capacity of 300000 tons/year of synthetic ammonia, urea and soda ash, 800000 tons/year of compound fertilizer, 330000 tons/year of ammonium chloride and 50000 tons/year of methanol

due to the fact that the company originally produced synthetic ammonia using lump coal, in order to reduce production costs, the company is gradually increasing the proportion of briquette. Changjiang Securities predicts that the proportion of briquette used by the company in 2009 will be 30% - 40%, and this proportion will reach about 50% in 2010. The increase of the proportion of briquette will bring about the reduction of the cost of synthetic ammonia

fengxiantao, a researcher in the basic chemical industry of Changjiang Securities, pointed out that if all synthetic ammonia uses lump coal, the cost of coal in the company's synthetic ammonia is 918 yuan/ton based on the consumption of 1.2 tons of lump coal per ton of synthetic ammonia and the current Yangquan smokeless medium block of 765 yuan/ton (excluding tax); Assuming that all synthetic ammonia uses briquette, there is a slip phenomenon. Based on the consumption of 1.5 tons of briquette for 1 ton of synthetic ammonia and the current Yangquan anthracite coal of 525 yuan/ton (excluding tax), the cost of coal in the company's synthetic ammonia is 788 yuan/ton; Assuming that other costs of synthetic ammonia remain unchanged, the cost of synthetic ammonia with briquette will be reduced by about 130 yuan/ton

and the company's product cost will also decline with the decline of synthetic ammonia cost. Assuming that 0.60 and 0.36 tons of synthetic ammonia are consumed per ton of urea and per double ton of combined caustic soda respectively, after using briquette to produce synthetic ammonia, the company's cost per ton of urea and per double ton of combined caustic soda will be reduced by 78 yuan/ton and 47 yuan/ton respectively. Assuming that the sales of urea and combined caustic soda in 2010 are 300000 tons and 500000 tons respectively, the company's cost will decrease by 46.9 million yuan

in addition, according to the announcement, as one of the raising investment projects at the beginning of listing, the dynamic structural adjustment treasury bond project is expected to be completed in May 2010. The project uses the gasifier slag, white powder and fuel coal produced by the company's chemical industry to mix and burn, and the heat and electricity generated are all provided to the company's production units. According to the calculation, the commissioning of the device is equivalent to saving 107100 tons/year of fuel coal for the company. Based on 734.33 yuan/ton of thermal coal, the project will save 39.34 million yuan and 78.69 million yuan/year for the company in 2010 and 2011, respectively

sodium borohydride project is the highlight of the future

1000 T/a sodium borohydride project is another raised investment project when the company was listed in 2008. On December 25, the daily economy called the company as an investor. According to the staff of the company's securities department, the project was originally planned to reach the state of use in December this year. However, due to the addition of some approval content in the preparation process of the project, the investment was delayed, but it is expected to reach the state of use in June 2010

according to the data, the output of sodium borohydride in China has increased rapidly since 2005, and reached 2000 tons in 2006. In foreign countries, sodium borohydride is widely used in papermaking industry, which has adverse effects on the properties of composites; In China, sodium borohydride is mainly used as reductant in the pharmaceutical industry, accounting for 87% of the total domestic output. According to the data disclosed by the company, it is expected that the depth of sup6 decarbonization layer will gradually increase in 2010, and the consumption of sodium borohydride in China will reach about 4800 tons

Changjiang Securities pointed out that the company uses metal sodium, hydrogen, boric acid and methanol as raw materials to produce sodium borohydride by trimethyl borate sodium hydride method, which improves the production efficiency of hydrogenation, esterification and borohydride reactions and the purity of intermediate products, and reduces the consumption of raw materials and solvents

in terms of cost, the power consumption per ton of sodium borohydride produced by common processes is about 6000 degrees; The power consumption per ton of sodium borohydride in the process route of Huachang Chemical is 3200 degrees. Assuming that the electricity price is 0.30 yuan, 840 yuan/ton of cost can be saved by electricity alone

Feng Xiantao predicts that the output of sodium borohydride of the company will be about 400 tons and 900 tons in 2010 and 2011. Based on the price of 160000 yuan/ton and the cost of 90000 yuan/ton, sodium borohydride will contribute 28million yuan and 63million yuan to the company in 2010 and 2011; Calculated at the income tax rate of 15% (excluding other expenses), the company's earnings per share will increase by 0.14 yuan and 0.31 yuan in 2010 and 2011. This project is expected to become a booster for the company's performance growth in the next two years. Shaozhenhua of Northeast Securities also pointed out that the company's sodium borohydride project has cost advantages. Static analysis can contribute eps0.15 yuan and 0.3 yuan to the company in 2010 and 2011 respectively, which may become a bright spot

company: the prices of major products began to rise

Changjiang Securities pointed out that the prices of the company's main products methanol, soda ash, ammonium chloride, urea and compound fertilizer have begun to rise. Due to its high flexibility, the inflection point of the company's performance will also appear. According to the calculation of Changjiang Securities, assuming that the average price of the above products increases by 50 yuan/ton, the company's earnings per share will increase by 0.40 yuan in total, which means that once the company's product price rebounds, the company's performance in 2010 may be significantly reversed

the above staff of the Securities Department said that in the first three quarters, due to the continuous decline of product prices, the development of the industry and the company was relatively difficult. Recently, the price of the company's main products began to rise, and it is expected that the fourth quarter will be better than the third quarter. A senior private equity person also said in an interview: "chemical stocks are elastic. Once the product price rises, companies with high performance flexibility will certainly rise first in terms of share price performance. At this time, the computer will display the motion curve and various results."

and shaozhenhua, a researcher in the Northeast Securities Industry, also pointed out after the survey: "the industry has been unbearable, and the recovery expectation is clear. Compared with listed companies in the same industry, the company's valuation is relatively low."

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