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● Changjiang Business Daily reporter Wang Jing

Yangtze Business Daily NewsTaihua New Materials (603055.SH) saw a significant increase in performance.

On the evening of July 14, Taihua New Materials announced that it expects the company to achieve a net profit of 400 million to 460 million yuan in the first half of the year, a year-on-year increase of 118.45% to 151.21%.

Taihua New Materials has been deeply involved in the nylon industry. Since last year, the operation of the chemical fiber industry has shown a positive trend. The company's sales have increased. At the same time, the company's 10 billion integrated projects have been gradually put into production, driving revenue growth.

A reporter from the Yangtze Business Daily noticed that in 2023, Taihua New Materials will make a full-year profit of 449 million yuan, and the highest estimated net profit in the first half of this year has exceeded the full year of 2023.

Production capacity expansion and good performance

Taihua New Materials' performance is expected to be good. In the first half of 2024, Taihua New Materials expects to achieve a net profit of 400 million to 460 million yuan, a year-on-year increase of 118.45% to 151.21%.

Taihua New Materials went public in 2017. In the year of listing, the company's operating income and net profit were 2.729 billion yuan and 367 million yuan respectively, both of which achieved substantial growth, but then declined for three consecutive years. By 2020, the company's operating income and net profit were 2.501 billion yuan and 120 million yuan respectively.

Starting from 2021, Taihua New Materials' performance has grown in fluctuations. From 2021 to 2023, the company's operating income was 4.257 billion yuan, 4.009 billion yuan, and 5.094 billion yuan, respectively, with year-on-year changes of 70.19%, -5.83%, and 27.07%, respectively; the net profit was 464 million yuan, 269 million yuan, and 449 million yuan, respectively, with year-on-year changes of 287.26%, -42.06%, and 67.17%, respectively.

In the first half of 2024, Taihua New Materials' performance will continue to grow, and its profits may exceed the full year of 2023.

Taihua New Materials stated that the company uses "innovative products to increase profits" and "conventional products to reduce costs" as its dual-wheel drive initiatives, fully leveraging the advantages of the entire industrial chain, actively promoting green, functional, differentiated and personalized product research and development, continuously optimizing product structure, strengthening market development, and strengthening cost control. The company's scale and brand effects continue to emerge. At the same time, the company's "green multifunctional nylon new material integration project" has been gradually put into production, and the company's main operating income has grown steadily, resulting in a significant increase in net profit compared with the same period last year.

A reporter from the Yangtze Business Daily noticed that in 2021, Taihua New Materials made a huge investment of 12 billion yuan. The company signed an "Investment Agreement" with the People's Government of Hongze District, Huai'an City, to build a new green multifunctional nylon new material integrated project in Hongze District, Huai'an City.

The projects include chemical fiber projects, weaving and dyeing and finishing projects. Among them, chemical fiber projects include 100,000 tons of recycled differentiated nylon yarn projects, 120,000 tons of PA66 differentiated nylon yarn projects, and 200,000 tons of PA6 differentiated polymerization and nylon yarn projects. Weaving and dyeing and finishing projects include 600 million meters of nylon grey cloth projects and 200 million meters of dyeing and finishing projects.

According to reports, the first phase of the green multifunctional nylon new material integrated project started construction in January 2022. Among them, the 60,000-ton annual production PA66 project has started trial production in April 2023. The remaining projects are being promoted as planned, and some production capacity has been put into production.

In the past three years, a total of 736 million yuan has been invested in R&D

Public information shows that since its establishment in 2001, Taihua New Materials has been deeply engaged in the nylon industry and gradually extended to the upstream and downstream industrial chains. It has now formed a complete industrial chain integrating nylon spinning, weaving, dyeing and finishing, and can provide global customers with a variety of high-end functional fabrics.

The chemical fiber industry has a strong cyclicality, and the operation of the chemical fiber industry has shown a positive trend since 2023. According to statistics from the China Chemical Fiber Association, the output of chemical fibers in 2023 was 68.72 million tons, a year-on-year increase of 8.5%, of which nylon output was 4.32 million tons, a year-on-year increase of 5.4%.

Nylon yarn is the core product of Taihua New Materials. In 2023, Taihua New Materials' nylon yarn sales volume reached 204,800 tons, a year-on-year increase of 41.83%. The sales volume of nylon grey fabric, polyester grey fabric, nylon finished products, and polyester finished products also increased significantly, driving the company's performance improvement.

In addition to the above-mentioned capacity construction, Taihua New Materials has also continued to increase its investment in research and development. From 2021 to 2023, the company invested 216 million yuan, 238 million yuan, and 282 million yuan in research and development respectively, totaling 736 million yuan.

On June 6 this year, the signing and unveiling ceremony of the "Donghua-Taihua Joint Innovation Institute" was held at the Songjiang Campus of Donghua University in Shanghai. It is reported that the Joint Innovation Institute unveiled this time will carry out interdisciplinary collaborative research in the fields of functional fiber material research and development, fabric technology development, new nylon fiber development, recycling technology, intelligent manufacturing technology, clothing design, and textile chemical innovation research.

On July 6, the company also announced that it plans to grant 5.056 million restricted shares to senior management and core backbone employees, accounting for 0.57% of the company's total share capital. The source of the shares is the company's repurchase in the secondary market with the aim of stabilizing outstanding talents.

The corresponding assessment years for this equity incentive plan are 2024-2026, and the conditions for release are: based on the net profit and revenue attributable to the parent in 2023, the growth rates of the net profit attributable to the parent in the three periods shall not be less than 20%, 40% and 60% respectively, or the growth rates of operating income shall not be less than 15%, 25% and 35% respectively. It is sufficient for one of the conditions to be met in each period.

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