Dongyue silicon material
Why does Dongyue Group's share price still fail to rise when the IPO is launched? Source: Hong Kong stock decoding
On February 24, Dongyue organosilicon, a spin off of Dongyue Group, successfully launched the IPO process on Shenzhen Stock Exchange.
It is worth noting that the original good news can boost the stock price of Dongyue Group. However, the stock price of Dongyue Group has gone from high to low. So, why is the secondary market too cold for the listing of the spin off business of Dongyang group?
The annual performance growth of Dongyue silicon materials fell for the first time
Dongyue silicon (300821-cn) (hereinafter referred to as "Dongyue silicon material") plans to issue no more than 300 million shares this time, and the total amount of shares publicly issued accounts for no less than 25% of the total share capital after issuance.
According to the announcement, Dongyue silicon material is one of the enterprises with the largest production scale in China's silicone industry. It has the integrated production capacity from metal silicon powder processing to silicone monomer, intermediate and downstream series of deep-processing products such as silicone rubber, silicone oil, gas phase silica, etc., and makes comprehensive use of relevant by-products, forming a relatively complete industrial chain. Now, two sets of silicone monomer production units have been built and operated, with an annual production capacity of 300000 tons of silicone monomer (equivalent to about 141000 tons of polysiloxane). According to the polysiloxane production capacity, Dongyue silicon material ranks in the top 10 in the world and the fourth in China. At the same time, it is also an important downstream deep processing product supplier of organosilicon in China. Now it has more than 120 specifications of various downstream products such as silicone rubber, silicone oil, fumed silica, etc.
With the launch of IPO process of Dongyue silicon material, the specific use of its raised funds is also widely known. According to the announcement, the fund raised by Dongyue silicon material will be used for the deep processing project of 300000 t / a silicone monomer and 200000 t / a downstream silicone products, the energy conservation and environmental protection technical transformation project of silicone monomer device, and the silicone R & D center project. After the completion of the project, the total capacity of silicone monomer will reach 600000 tons / year (about 282000 tons / year of polysiloxane). According to the existing capacity of enterprises in the same industry, by 2021, the capacity of Dongyue silicon polysiloxane is expected to enter the top five in the world.
It is worth mentioning that while Dongyue silicon disclosed the purpose of the raised funds, it also updated the whole year's operating performance in 2019. In 2019, the growth rate of Dongyue's silicon material business performance was the first time that it failed (based on the growth rate of 2016-2019 annual performance).
According to the financial data, as of December 31, 2019, the operating revenue of Dongyue silicon materials was 2.733 billion yuan, down 19.63% year on year; the net profit was 553 million yuan, down 16.59% year on year. With the double-digit decline in the growth of revenue and net profit in 2019, the external expectation of achieving double-digit growth for four consecutive years has been shattered, which indirectly reflects that the stable growth trend of the operating performance of Dongyue silicon material has also been broken, and there will be many variables whether the operating performance can return to double-digit growth in the future.
Dongyue Group's annual performance is full of alarm, and the market releases bad air ahead of time?
On February 21, the financial China News Agency published the article "seeing the scenery of electric vehicles, Dongyue Group with" China Film "on the" financial Pro "app, explaining the reason why the stock price keeps falling.
Specifically, the stock price downturn of Dongyue Group is mainly affected by performance. Dongyue Group's performance for the whole year of 2019 has released the profit warning. In the 11 months ended November 30, 2019, the net profit attributable to owners of Dongyue Group decreased by about 35% year-on-year, based on which it is estimated that the performance of the whole year 2019 will also decline. The profit decline is close to 40%. The board of directors gives the answer that the average price of products is lower than that in 2018, which leads to the decrease of the company's relevant income and gross profit rate.
In addition to the pressure of business performance, the sudden outbreak of the epidemic has also brought a certain negative impact on the price of Dongyue Group's products. According to the price trend of PTFE (polytetrafluoroethylene) from 2016 to 2019, since April 2019, the average unit price of the primary shape of PTFE import has fallen to the low point within the range, and then it has been hovering around 10000 US dollars / ton to 12000 US dollars / ton. In 2020, the novel coronavirus epidemic hampered industrial production and depressed product demand. In this case, the price of PTFE in the first quarter of this year is difficult to improve.
It can be seen that under the double-click of performance decline and epidemic situation, the market has doubts about the future sustainable profitability of Dongyue Group and the listing of its spin off business, and what kind of benefits it really brings to the company, so that the good news that Dongyue silicon material has successfully entered the IPO process is hard to shake the depressed stock price of Dongyue Group.