Refractory industry: closely follow the pace of energy saving and seize the opportunity of integration

Jan 02,2013


The main downstream industry of refractory materials is the steel industry. According to the statistics of the world's application industries, 70% is used in steel smelting, 17% is used in the building materials industry, 4% is used in the chemical industry, and 3% is used in the non-ferrous metal industry. The proportion consumed by my country's steel industry is 65%, and cement is 10%. Other differences are not big.

Downstream demand is strong. The steel industry is expected to demand 12.49 million tons in 2010, and the glass industry is expected to demand 6,752 tons and 71,504 tons of melt-cast alumina and medium and high-grade melt-cast zirconium corundum in 2010. In addition, non-ferrous metals and cement also maintained a stable demand. The supply of upstream raw materials is sufficient.

My country's industry has maintained rapid growth, basically maintaining a growth rate of more than 20% (8% in 2008), and a growth rate of 33% in 2009. At present, my country's production and sales have ranked first in the world. In 2007, my country's output has exceeded 50% of the world's total output, the annual sales revenue exceeded 100 billion yuan, and the total profit exceeded 8 billion yuan.

The refractory industry has "two highs", and the proportion of raw materials in the cost is higher than 50%. The gross profit margin is as high as 30%, which is much higher than that of general manufacturing enterprises. The main reason is that the refractory industry has relatively high requirements for technology, and downstream enterprises need to obtain stable quality assurance to ensure the continuity, stability and safety of their production. Therefore, the four technology-based listed companies have won with their high-tech and R & D capabilities.

Industry Trend 1: Integration and merger of the refractory industry is an inevitable trend. The form is mainly upstream integration and intra-industry integration. The first reason is that companies in the industry are in order to avoid fluctuations in gross profit margins, and the second is that the integration of downstream industries has triggered the integration of many refractory industries of the company. Large downstream enterprises need large-scale advantageous refractories to provide better refractories and services. The integration of listed companies will occur in enterprises with resources or customers.

Industry trend 3: Due to the need for energy saving, the current trend of using high-end instead of low-end is significant, which is good for enterprises with good technology and excellent products in the industry.

Industry trend 4: The overall contracting trend in the field of steel production is significant. The replacement frequency is high. If there are professional companies to provide corresponding services, it is a strong guarantee for steel production. The integration of the steel industry will strengthen group management, and overall contracting will help it reduce costs.

Industry Trend 5: Expand overseas markets and pursue further development. At present, Punai is doing the best, with overseas sales accounting for 20%.

In 2010-11, Pu Nai Co., Ltd. had an EPS0.48 and 0.65 yuan, and PE was 30 and 23 times. The company's upstream and downstream integration strategy was significantly faster than that of Lier, and the overall contracting ratio also had a lot of room for improvement. At the same time, considering the rising cycle of industry demand, it is recommended to increase its holdings, with a target price of 17.4 yuan. The products of Luyang Co., Ltd. are emerging ceramic fibers with a wide range of uses and good performance, and the prospects are promising. In 2010-11, the EPS0.8 and 1.1 yuan were cautiously increased. Ruitai Technology has invested in alkaline refractories in accordance with the energy-saving policy, and the performance of capacity release in 10 years will also be reflected. Beijing Lier has the highest growth and gross profit margin, both reaching about 40%.

Louzi Village, Qidu Town, Linzi District, Zibo City, Shandong Province, China

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