On April 22, at the 2018 Annual General Meeting held by Xingfa Group (600141), the company's proposal to acquire 50% equity of Hubei Xingrui Silicon Materials Co., Ltd. was approved. Li Guozhen, chairman of Xingfa Group, told the reporter that the bigger and stronger organic silicon industry is the company's long-term strategy. Through restructuring and subsequent expansion and upgrading, the company has confidence to enter the industry's first echelon.


"Admission from 2009, this industry (silicone) we have been cultivating for 10 years, has not made money or even lost money in the past few years, and finally achieved good returns in the past two years." Li Guozhen introduced, and phosphate ore, glyphosate Similarly, silicone has become an important pillar industry of Xingfa Group.


The acquisition of Xingrui Silicon Materials will also significantly increase the profitability of listed companies. According to the disclosure, in 2017 and 2018, Xingrui Silicon Materials realized operating income of 3.5 billion yuan and 4.8 billion yuan respectively, achieving operating profit of 430 million yuan and 970 million yuan respectively, and net profit of 346 million yuan and 700 million yuan respectively.


Xingrui silicon materials make a lot of money due to the big price of silicone prices. The reporter found that the price of organic silicon rose unilaterally from July 2016, starting from 12,000 yuan / ton, and the highest price in May 2018 exceeded 35,000 yuan / ton. However, in the second half of last year, the price of organic silicon experienced another wave of deep adjustment, which once fell to around 18,000 yuan / ton, and rebounded in the first quarter of this year. The current price is about 22,000 yuan / ton.


"In fact, we do not want the price to skyrocket, and we hope that there will be a price with a stable profit margin." Cheng Yali, the secret secretary of Xingfa Group, said that the restructuring of the restructuring party is also very rational, and the final pricing and profit commitment also considers market volatility. factor. According to the inquiry, the net profit after tax of Xingrui Silicon Materials promised by the counterparty in 2019, 2020 and 2021 is not less than 279 million yuan, 360 million yuan and 424 million yuan respectively.


“Xingrui Silicon Materials should have no problem in fulfilling its profitability commitment. On the one hand, the forecast of profitability is very conservative. On the other hand, Xingrui Silicon Materials is undergoing technological transformation and expansion, and the unit cost will be significantly reduced after completion.” Cheng Yali Introduction The company's recycling industry chain with chlorine balance as the core can significantly reduce production costs and increase comprehensive income.


It is understood that the by-product of glyphosate produced by Taisheng Chemical Co., Ltd., a subsidiary of Xingfa Group, is methyl chloride, which can be used as raw material for the production of crude silicone monomer. This is also the origin of Xingfa Group's intervention in organic silicon, and the production of chlor-alkali business of Xingrui silicon material. Liquid chlorine and liquid alkali can be used as raw materials for producing glyphosate, and chlorine balance can be achieved through two production lines, which can effectively reduce production and transportation costs and pollutant treatment costs.


In addition, Xingfa Group will also focus on extending the industrial chain of silicones. During the acquisition process, Xingfa Group plans to raise funds of no more than 1.5 billion yuan for the upgrading and upgrading of organic silicon technology and 100,000 tons of annual/year special silicone rubber and silicone oil expansion and expansion projects. "In the current silicone production capacity, about half of it is used by itself. After the downstream production line is established, the proportion that is not used will be even greater." Cheng Yali introduced.


Li Guozhen said that in the downstream industry of silicone, Xingfa Group will focus on the differentiated route. “As an alternative to natural rubber and engineering plastics, silicones are used in a wide range of applications. There are tens of thousands of varieties downstream. We will select several products to achieve the ultimate in the industry.”


It is understood that after undergoing the previous wave of adjustment and clearing, the manufacturers of organic silicon industry in China have been greatly reduced. Only 9 of them are in normal production, including Jiangxi Xinghuo, Hesheng Silicon Industry (603260) and Xin'an Co., Ltd. (600596). , Xingfa Group, etc., a number of companies have launched a new round of expansion.


"Without development, there is still the possibility of being eliminated. Our goal is to enter the top three in the industry." Li Guozhen said.