【行业研究报告】理文化工-Strategic Expansion Amidst Market Consolidation

WemaintaintheTPatHK$4.30andreiterate“Buy”rating.Wemaintain
theforecastedEPSin2023-2025atHK$0.581/HK$1.136/HK$1.489,
respectively,whichrepresentsYoYgrowthof(58.5%)/95.3%/31.1%.We
maintaintheTPatHK$4.30,representing2023/2024/2025PERof7.4x/
3.8x/2.9x,respectively.
Lee&ManChemical(LMC,orthe“Company”)isabeneficiaryofthe
Lee&ManChemical(LMC,orthe“Company”)isabeneficiaryofthe
accelerationinmarketconsolidation.Sincethestartof2024,exceptfor
someofthepolymersproductslikePTFE,LMC’sothermainproductshave
seenpricedeclines,withcausticsoda,dichloromethane,andhydrogen
peroxidedecreasingby2.3%,7.6%,and6.7%YTD,respectively.While
short-termprofitsoftheCompanymaybeimpacted,pricedeclinesare
poisedtoeliminatesmaller,highlyindebtedcompaniesandaccelerate
marketconsolidation.Withaverylowgearingratioof9.8%asat1H23and
significantpresenceintheJiangsuandJiangximarkets,weexpectLMCto
graduallyincreaseitsmarketshareasweakerplayersexitthemarketand
alsothroughacquisitionofsmallerplayers.
Activeexpansionintonewmaterialsbusinesses.Theexpansionprojectin
Jiangxi,oncecompletedin2025,canproduce10,000tons/yearlithium
hexafluorophosphate(LiPF6),20,000tons/yearpolyvinylidenefluoride(PVDF),
and50,000tons/yearofancillaryhydrogenfluorideproducts.Inaddition,the
3,000tons/yearoffluoroethylenecarbonate(FEC)facilityinZhuhai,whichis
plannedtobecompletedintwophasesby2024and2025,willsignificantly
increasetheCompany’sproductioncapacityforlithium-ionbatteryelectrolyte
additives.Weestimatethattheseproductscancontributeanadditional
revenueofRMB3.3billionatcurrentmarketprices,onceinfullproduction.
Catalysts:1)Theaccelerationinmarketconsolidationmayraisethe
Company’smarketshare,and;2)theCompany’snewmaterialsprojectsare
settocommenceproductionin2024and2025.
Risks:1)Thecomingyearsmayseeintensemarketcompetitiondueto
significantcapacityincreases,and;2)technologicaladvancementsin
batteriescouldprofoundlyimpactthedemandfortheCompany’sproducts.
Rating:Buy
Maintained
6-18mTP目标价:HK$4.30
Revisedfrom原目标价:HK$4.30