2 Billion! To Supplement Liquidity To China And Thailand, 78 Billion 700 Million Of The Largest Shareholder Of The Debt Is Making Financial Support.

Xinjiang Zhongtai chemical Limited by Share Ltd and stock holding company (hereinafter referred to as "Zhongtai chemistry") issued a notice recently that according to the needs of operation and development in 2020, after consulting with the controlling shareholder Xinjiang Zhongtai (Group) limited liability company (hereinafter referred to as "Zhongtai group"), China will be provided by Zhongtai group to the Sino Thai Chemical and controlling subsidiary company in 2020 in the amount of no more than 2 billion yuan. Financial assistance is used to supplement the liquidity of the company and its subsidiaries. According to the actual production and operation needs of the company and the controlling shareholder, it should be recycled in batches. The interest rate of the financial subsidy should be compared with the capital cost of the similar products that the company applies for financing, but it will not exceed the interest rate of the CtaI group to obtain financing funds. The specific amount of borrowing, time limit and interest rate shall be based on the contract signed.

China and Thailand group is the controlling shareholder of Zhongtai chemical company. According to the actual operation and development, the company improves the loan maturity structure and meets the liquidity needs of the company. At the same time, it adopts various ways, including controlling shareholders' financial support, to raise the efficiency and efficiency of the company's financing.

The announcement shows that Xinjiang Zhongtai (Group) Co., Ltd. is a wholly owned subsidiary of the state owned assets supervision and Administration Commission of the the Xinjiang Uygur Autonomous Region people's government. Xinjiang Zhongtai (Group) Co., Ltd. is the controlling shareholder of Sino Thai chemical industry. China and Thailand group and its subsidiaries, Urumqi ring Peng limited, and Xinjiang Zhongtai international supply chain management Limited by Share Ltd jointly hold 23.67% of the company's shares.

As of December 31, 2019, the total assets of China and Thailand group were 103 billion 929 million 999 thousand yuan, total liabilities 78 billion 778 million 990 thousand and 800 yuan, net assets 25 billion 151 million 8 thousand and 200 yuan, operating income 121 billion 232 million 936 thousand and 600 yuan in 2019, and net profit of 190 million 279 thousand and 200 yuan (by Lixin Accounting firm (special general partnership)).

Public information shows that the Sino Thai Group is a wholly state-owned company directly funded by the the Xinjiang Uygur Autonomous Region people's government and directly supervised by the SASAC. It is mainly engaged in the planning and design, project construction, resource development, product development, production and sales of chlor alkali chemical industry, coal chemical industry, Petrochemical Industry and other industries. The predecessor of the company was the Xinjiang caustic soda plant, which was founded in 1958. It completed the shareholding system reform in December 2001 and established the Xinjiang Zhongtai chemical Limited by Share Ltd, which was listed in 2006. In order to develop the local chemical industry in Xinjiang, in July 2012, the people's Government of the autonomous region invested and established the Zhongtai group on the basis of Sino Thai chemistry.

China and Thailand chemistry was founded in 2001, mainly engaged in PVC, ion-exchange membrane caustic soda, hydrochloric acid chlor alkali chemical products, as well as viscose fiber and spinning and other chemical fiber products, and engaged in related material circulation and import and export business. Xinjiang is a leading resource transformation enterprise which is mainly supported by the company. The company is a leading enterprise in the domestic chlor alkali chemical industry with a complete industrial chain, and has successfully built up the coal and thermoelectricity chlor alkali chemical industry viscose viscose yarn upstream and downstream integrated circular economy industrial chain.

China and Thailand have 1 million 730 thousand tons of PVC, 1 million 200 thousand tons of ionic membrane caustic soda, 740 thousand tons of viscose fiber, 2 million 700 thousand spindles of spinning, 2 million 400 thousand tons of calcium carbide and 1 million 940 thousand KW back pressure generating units, so as to fully realize the efficient transformation of resources and energy in situ, and build intensive and industrial production bases of chlor alkali and viscose yarn, forming the core competition of the company in terms of resources, cost, technology and scale. Competition advantage.

According to the financial report, before 2016, the main business of China and Thailand chemistry maintained stable development trend, and the production and sales volume of various products steadily increased. During the 2015-2016 years, the company has completed the shareholding of Xinjiang's richda, Jinfu yarn, blue sky logistics and so on, while integrating the textile plate assets of the company, relying on Lantian petrochemical logistics company, vigorously developing trade business, so 201 In the 6 year, the company's trade revenue increased substantially. In 2018, the trade revenue reached 47 billion 200 million yuan, accounting for 67% of the total revenue of the company. But the profit margin of trade is relatively low, and the main source of profits of the company is still PVC, viscose fiber and other basic chemicals.

Song Tao, an analyst at Shen Wan Hongyuan securities, said earlier that China and Thailand had invested mainly in self financing and bank loans. There was a certain pressure on the free cash flow of enterprises. Therefore, the debt ratio of China and Thailand was basically maintained at over 60%, which is at a relatively high level in the same industry. Since 2016, with the revival of chlor alkali industry and the layout of China and Thailand's chemical industry chain, the average ROE has been maintained at over 10%.

In 2020, China and Thailand planned to produce 1 million 940 thousand tons of polyvinyl chloride resin (including resin, bulk resin, etc.), 1 million 363 thousand and 200 tons of caustic soda, 2 million 680 thousand tons of calcium carbide, 13 billion 205 million degrees of electricity, 630 thousand tons of viscose fiber, 352 thousand and 500 tons of viscose yarn, and the total profit is expected to be 305 million 190 thousand yuan, with net profit of 166 million 640 thousand yuan (which belongs to 108 million 410 thousand yuan of net profit of parent company).

Song Tao believes that China and Thailand adhere to the high quality and high speed development of chemistry in parallel, vigorously cultivate energy and chemical industry, accelerate the transformation of new and old energy and upgrading the quality of the industry. We will promote the development of energy chemical industry and intensify joint efforts with industries such as chlor alkali, coke and charcoal industries. We will transform and upgrade backward production capacity with new and high technology, revitalize our assets and expand our main business. Future Ltd will continue to maintain a certain amount of capital expenditure for several years to meet the development needs of the company.

According to the financial report, in 2019, China and Thailand achieved 83 billion 120 million yuan in business revenue, up 18.37% from the same period last year, and realized net profit of 343 million yuan, a decrease of 85.87% over the same period last year. The net cash flow generated by the company's operating activities was 8 billion 203 million yuan, an increase of 28.32% over the same period and a profit of 0.16 yuan per share.

From the perspective of revenue and gross profit in 2019, chlor alkali chemical sector and textile industry sector are the main source of profits for China and Thailand.

During the reporting period, the Sino Thai Chemical chlor alkali chemical sector achieved operating income of 12 billion 642 million yuan, down 6.82% from the same period last year. Among them, the operating income of PVC and chlor alkali products was 10 billion 97 million yuan and 2 billion 509 million yuan respectively, representing a decrease of 1.87% and 22.37% compared with the same period last year.

Benefiting from the advantages of Sino Thai chemical industry chain, the gross profit of PVC in the reporting period amounted to 2 billion 837 million yuan, up 1.75% from the same period last year. Affected by the big environment, PVC production and sales have declined, production reached 1 million 716 thousand tons, and sales volume reached 1 million 710 thousand and 900 tons, down 4.11% and 2.91% respectively from the same period last year.

Affected by the "3.21" Xiangshui incident and other chemical enterprise accidents, the environmental policy of the reporting period has been stricter, the pressure on the environmental protection of enterprises has been greater, the price of caustic soda has gone up and down, making the gross profit of chlor alkali products decreased by 39.09% to 1 billion 167 million yuan, and the gross profit margin dropped to 46.50%. Due to the superiority of Sino Thai chemical integration construction, part of caustic soda has dropped from 14.35% to 19 thousand and 100 tons compared with that of the textile sector.

China and Thailand chemical textile industry board mainly includes viscose staple fiber and viscose filament two parts. Viscose prices continued to decline, the average price of viscose staple in the reporting period decreased by 19.89% to 11625.53 yuan / ton compared with the same period last year, making Sino Thai chemical business income down 9.11% to 7 billion 27 million yuan over the same period.

During the reporting period, China and Thailand chemical continued investment in Sino Thai textile and its subsidiaries. However, because some projects had not yet been put into operation, they had not yet made investment returns, and their operating costs increased. The gross profit margin was reduced to 541 million yuan and the gross profit margin was reduced from 20.66% to 7.70%. China is a large country of viscose production and export. Due to the impact of Sino US trade friction, the export of viscose is blocked, and the order of products is reduced. The stock of viscose staple fiber and viscose filament was 35 thousand and 700 tons and 26 thousand and 800 tons respectively, up 202.54% and 137.17% compared with the same period last year.

During the reporting period, the demand for viscose fiber and downstream textile and garment industry continued to decline due to trade friction, and the price of viscose continued to decline. At the beginning of 2020, the locusts disaster in the Middle East reduced the global cotton production which was gradually decreasing. The cotton price was expected to rise gradually, and the substitution advantage of viscose gradually emerged. In order to ensure the completion of alar's daily production and operation capital turnover in September 2018, the company provides financial assistance to stabilize the supply chain of enterprises. The company is currently building viscose projects mainly for the Jin Fu yarn industry 1 million 300 thousand spindles spinning project. It is expected that with the completion of the project and the industry's recovery, the viscose production capacity of the downstream of China and Thailand will gradually increase, and the channel will gradually expand, which will help to improve the company's profitability.

The modern trade plate is the highest in China and Thailand in the proportion of chemical business income, but the gross profit margin is relatively low. During the reporting period, business revenue increased 31.82% to 62 billion 276 million yuan, and gross profit was 897 million yuan. The main purpose of the modern trade plate is to extend the industrial chain and enhance the value chain. The perfection of the modern trade plate has improved the quality of enterprise development and the competitiveness of enterprises, and promoted the steady increase in the overall revenue of China and Thailand chemical camp.

In the first quarter of 2020, China and Thailand achieved 15 billion 835 million yuan in business revenue, a decrease of 14% compared with the same period last year. Net profit attributable to the owners of the parent company was 12 million 936 thousand and 600 yuan, a decrease of 93.11% compared with the same period last year, and a basic earnings per share of 0.006 yuan.

Affected by the epidemic, sales of major products were reduced, and the prices of viscose fiber and viscose yarn in the textile sector continued to decline. In the first quarter, China and Thailand's chemical business income was 15 billion 835 million yuan, a year-on-year decrease of 14%; the net profit attributable to the owners of the parent company was 12 million 936 thousand and 600 yuan, a decrease of 93.11% compared with the same period last year; and the basic earnings per share were 0.006 yuan.

Analysis shows that the main reason for the change in the performance during the reporting period is that the downstream demand for viscose staple continues to weaken and prices fall, while downstream customers are delayed in resuming work, and the sales of major products are reduced and the prices of products continue to decline.

In order to increase the diversity and diversity of viscose fiber products and resist market fluctuations, China Thai Chemical Holdings Co., Ltd., Xinjiang Zhongtai Textile Group Co., Ltd., alar Zhongtai Textile Technology Co., Ltd. has begun to make some technical modifications to some production lines, and plans to produce clean, high whiteness viscose differential fiber and enhance the added value of products. After the completion of the transformation, Xinjiang Zhongtai Textile Group Co., Ltd. has the annual production capacity of clean high whiteness viscose differential fiber 40 thousand tons / year, alar Zhongtai Textile Technology Co., Ltd. the annual production capacity of clean high whiteness viscose differential fiber is 50 thousand tons / year, and it is expected to be completed and put into operation in the second half of the year.

In addition, the demand for viscose staple fiber and downstream textile and clothing continues to weaken due to the continuous trade friction, resulting in the continuous decline of viscose staple fiber and viscose yarn prices. In addition, affected by the epidemic, shrinking market demand and falling prices, downstream customers delayed to return to work, sales of major products in China and Thailand decreased, and product prices continued to decline. According to a quarterly report, China and Thailand expects to lose 3.5-5 billion in the first half of this year.

Song Tao introduced that, in terms of petrochemical industry, China and Thailand group rely on Xinjiang's industrial policies and Xinjiang's abundant natural resources, and Xinjiang Korla Zhongtai petrochemical limited liability company started 1 million 200 thousand tons PTA project in July 2016, and the company shares 30%. The project is located at Zhongtai Group Petrochemical Industrial Park in upper storehouse of Korla. The total investment of the project is 27 billion yuan, covering an area of 5000 mu, forming an annual output of 1 million 200 thousand tons of PTA, 1 million 500 thousand tons of polyester fiber, 950 thousand tons of refined oil, 270 thousand tons of benzene and 430 thousand tons of light hydrocarbons, and is expected to be fully completed and put into operation in 2021. The project fills the gap in the petrochemical and chemical fiber industry, making the company form a double chain of "polyester raw material fiber" and "cotton spinning raw material fiber", thus forming a blending industry pattern and improving the market competitiveness.

Observation shows that Xinjiang is one of the main producing areas of cotton in China. A large number of cotton pulp and cotton lint are produced locally, and the viscose staple production enterprises located in Xinjiang will have huge raw material cost advantages. As an important energy producing area in China, the price of electricity in Xinjiang is also significantly lower than that in other parts of the country. Compared with the industrial enterprises in the mainland, Xinjiang enterprises also have an advantage in the cost of electricity. In addition, Xinjiang has given some subsidy to cotton yarn products which are produced and transported to the mainland sales area of local cotton (including viscose staple). Therefore, the viscose and yarn of the company have prominent advantages over the mainland enterprises.

Up to now, Xinjiang Fuli holding gold Fu yarn industry is the largest air spinning production enterprise in the country, now has 1 million 500 thousand spindles spinning capacity, the same is Xinjiang Fuli holding's Fuli Zhen Lun is also the important spinning enterprise, now has 1 million spindles spinning. Jinfu yarn industry, Fuli Zhen Lun and Xinjiang Fuli Da space adjacent to each other, Sino Thai chemical viscose staple products can be directly used for the production of these two enterprises, will greatly reduce the company's entire industrial chain logistics and transportation costs.

Song Tao analysis, China and Thailand chemistry 2016-2017 years of viscose business gross margins are significantly higher than peers, in the viscose staple fiber when the spirit of the rise, the company will have a strong profitability, greatly benefit from the increase in viscose prices, according to estimates, viscose prices rose 1000 yuan / ton, the company net profit elasticity of 550 million yuan.

Benefiting from the upgrading of consumption and the rise of disposable income of residents, the demand for medium and high end fabrics has increased. Viscose fiber has the advantages of natural comfort (comparable with cotton), good dyeing property (better than cotton), hygroscopicity and handle. It has a higher proportion in high-end fabrics than that of polyester fiber or even part of cotton, and has the characteristics of cleanliness, hygiene and environmental protection. Nonwovens high quality raw materials are widely used in textile industry, especially in medical textiles, health care products, household cleaning materials, packaging materials and other fields, which further stimulated the growth of viscose staple fiber demand. In the next few years, the demand for viscose staple fiber is still higher than that of spinning growth. The CAGR in the next three years will be about 3-4%.

It is reported that in order to increase the difference and diversity of viscose fiber products, in the first quarter of 2020, the Sino Thai Chemical start-up technology transformation project was planned to produce clean high whiteness viscose differential fiber, and it is expected to achieve annual production capacity of 90 thousand tons in the second half of the year. Meanwhile, China and Thailand will improve the industrial chain layout at the bottom of the cycle, and further expand their competitive edge.