NHU(002001) 山西证券·2024-12-27 08:50Investment Rating - The report initiates coverage on Newand (002001 SZ) with a Buy-B rating [1] Core Views - Newand is a leader in China's fine chemical industry, leveraging its strong technical capabilities to break through high-value-added, high-barrier, and large-capacity products [1] - The company has established leading technical strengths in vitamins, methionine, flavors and fragrances, and PPS, with significant cost advantages and a rich product portfolio [1] - Newand's profitability has consistently ranked at the top of the A-share chemical sector [1] Financial Projections and Valuation - Revenue is projected to grow from 21 226 billion yuan in 2024 to 27 698 billion yuan in 2026, with year-over-year growth rates of 40 4%, 15 1%, and 13 4% respectively [4] - Net profit attributable to shareholders is expected to increase from 5 376 billion yuan in 2024 to 6 861 billion yuan in 2026, with year-over-year growth rates of 98 8%, 13 3%, and 12 6% respectively [4] - EPS is forecasted to be 1 75 yuan, 1 98 yuan, and 2 23 yuan for 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 12 6x, 11 1x, and 9 9x [4] Business Segments Vitamins - Newand is a leader in the vitamin industry, with vitamin A and E capacities of 8,000 tons and 60,000 tons, accounting for 14 8% and 21 43% of global capacity, respectively [34] - The company benefits from tight supply and rising prices in the vitamin market, driven by factors such as DSM's exit from the animal nutrition business and BASF's production disruptions [18][152] - Newand's vitamin E net profit margin remained high at 28% in 2023, despite price pressures, due to cost reductions in key intermediates like citral and linalool [18] Methionine - Newand has become a global leader in methionine, with a solid methionine capacity of 300,000 tons and plans to build an 180,000-ton liquid methionine project [15][190] - The company's methionine business achieved a net profit margin of 37% in the first half of 2024, contributing 33% of revenue and 53% of net profit [190] - The liquid methionine project, expected to be completed by the end of 2024, is projected to generate 1 382 billion yuan in revenue and 511 million yuan in net profit at full capacity [190] Flavors and Fragrances - Newand is the largest domestic flavors and fragrances company, with a diverse product portfolio and a strong market position [15] - The global flavors and fragrances market is recovering, with domestic exports growing by over 20% in 2024, benefiting Newand's business [15][193] - The company's flavors and fragrances segment has shown an upward trend in gross margin, driven by economies of scale [15] New Materials - Newand is a pioneer in the domestic PPS market and is expanding into the PA66 industry, with significant growth potential [2][20] - The company's PPS capacity is 22,000 tons, and it is investing in a 480,000-ton PA66 project in Zhejiang, which is expected to generate 14 5 billion yuan in revenue and 2 1 billion yuan in net profit at full capacity [20][53] Industry Insights Vitamins - The vitamin industry is highly concentrated, with high technical barriers and stable competition [18] - Supply-side disruptions, such as BASF's production issues and DSM's exit, have driven up vitamin prices, benefiting domestic leaders like Newand [18][152] - The vitamin E market is expected to remain strong, even if BASF resumes production, due to aging facilities and reliance on imports [155] Methionine - Methionine is a key feed additive with a global market size of over 32 5 billion yuan, and domestic companies are increasing their market share through technological breakthroughs [172][174] - Newand's integration with Sinopec's Zhenhai refinery provides cost advantages for its liquid methionine project, enhancing its competitiveness [190] Flavors and Fragrances - The global flavors and fragrances market is highly concentrated, with the top four companies accounting for over 50% of the market [193] - Domestic companies like Newand are benefiting from the shift of global production and R&D to emerging markets, as well as the recovery in global demand [193] New Materials - The PPS and PA66 markets are growing, driven by demand from industries such as new energy vehicles and consumer electronics [2][20] - Newand's investments in PPS and PA66 are expected to strengthen its position in the high-performance materials market [20][53]