New materials, new markets
Demand for ultra-fine glass wool and glass wool blows out, with broad market prospects
In 2021, the main business income of my country’s glass fiber and products industry will reach 124.4 billion yuan, a year-on-year increase of 21.4%; the total profit will increase by 95.5% year-on-year, reaching a record 23.14 billion yuan. In 2022, with the global energy storage demand being ignited again, glass fiber ushered in another industry-wide high boom. As the basic industry of the national economy, the state has issued a series of industrial policies to vigorously support the material industry to encourage and support the development of the wave fiber industry, which undoubtedly creates a very favorable market environment for the development of the industry.
The “Thirteenth Five-Year” Development Plan for Fiber Composites Industry issued by my country clearly stated that “promoting the development of high-performance glass fibers, focusing on the development of alkali-resistant, low-dielectric, flat fibers, ultra-fine electronic fibers and ultra-thin electronic cloths, etc. Functional glass fiber, accelerate the research and development of intelligent and green manufacturing technology, and promote the industrialization of high-strength and high-modulus glass fiber and thermoplastic composite materials.” By 2022, a series of policy documents such as the “14th Five-Year Plan for Raw Materials Industry Development” successively launched by relevant ministries and commissions have once again mentioned the high and sustainable development of high-performance fibers and composite materials such as glass fiber and carbon fiber. of attention.
For enterprises in the industry, with the support of a series of national industrial incentive policies, how to break through capital barriers, scale effect barriers, technology and talent barriers, brand and certification barriers, and grasp the basic conditions of good policy guidelines and systems , is a new challenge, but at the same time this track is also full of infinite hopes and opportunities.
Looking back at the last round of glass fiber development opportunities, the country proposed the direction of developing green buildings. Due to the safety, reliability and good energy-saving effect of glass fiber, it was quickly promoted to the field of construction and installation. Such lightweight materials include GRC panels, thermal insulation panels, fireproof panels, and more. In its subdivision field, ultra-fine glass wool is also called microfiber glass wool because of its light weight, high temperature resistance, low temperature resistance, sound insulation and non-combustion, low thermal conductivity, no fear of moth-eaten, no skin sting, and high water repellency. It is also widely used in building installations.
Now, entering 2022, global political and economic instability factors have increased, and “black swan” events have occurred frequently, resulting in another energy crisis, and the pace of new energy development and utilization in various countries has accelerated. Taking wind power as an example, my country has set off a wave of wind power installations in the past two years. By 2022, my country’s installed wind power capacity will still be as high as 55GW. As an important composite material, glass fiber is widely used in the blade manufacturing of large-scale units, and as special materials, microfiber glass wool and glass fiber wool belong to the glass fiber industry, and are now more used in battery separators, Thermal insulation of energy storage battery separators and manufacture of laboratory-grade filter paper to clean the air.
From the product connotation point of view, microfiber glass wool belongs to the “specialized, refined and new” reserve project, which is in line with the long-term goal of carbon neutrality. Although the material is inconspicuous, it has very broad application prospects. Inner Mongolia Shihuan New Materials Co., Ltd. has been deeply involved in microfiber glass materials for decades and is the first company in the region to be listed on the New Third Board. Such a company has emerged in the tide of the times and quickly became a dark horse in the industry.
Inner Mongolia Shihuan New Materials was established in April 2011. In 2015, the company’s laboratory was identified as an autonomous region-level glass fiber industry engineering laboratory by the People’s Government of Inner Mongolia Autonomous Region. In 2016, it was rated as “Vice Chairman Unit” by the National Microfiber Glass Wool and Its Products Special Committee, and successively passed the ISO9001:2015 quality management system certification, the national high-tech enterprise certification, and passed the autonomous region microfiber glass wool technology research center. identified. As of 2021, the company has obtained 25 national patents. After years of development, the company has become the leading enterprise producing microfiber glass wool in the country.
From 2017 to 2021, the company’s operating income increased from 77.4683 million yuan to 273 million yuan. Net profit attributable to the parent increased from 9.1746 million to 69.5548 million. In just 4 years, the profit has increased by nearly 8 times. Last year, the profit was nearly 70 million yuan, reaching a blowout outbreak. The company’s main new material prices continue to rise, and this year’s annual performance may continue to increase significantly.
The reason why Shihuan New Materials can achieve such high-energy achievements is precisely because the company aims at the demand side, expands the supply side, strictly controls costs, pays close attention to technology, and relies on technical leverage to achieve long-term development, and finally builds the cornerstone of its rise.
Beginning in the second half of 2020, the glass fiber market has turned hot, the unit price of products has risen, and related product companies have made comprehensive profits. From the trend point of view, the demand of the large glass fiber industry still maintains a stable growth this year. Under the influence of the new demands of the times, the microfiber glass wool subdivided in glass fiber has more uses. Because of its particularity and high efficiency, it can be further promoted and penetrated into the use of battery separators, energy storage battery separators, laboratory filter paper, and air purification in automobiles, electric vehicles, ship manufacturing, wind energy, solar energy and other industries. Glass wool has become the hottest and most promising industry in the market in the past year.
Shihuan New Materials is mainly based on the most advanced flame blowing technology. An important product, the production of glass fiber filter paper with large dust holding capacity and high filtration efficiency is the product of this process. At present, there are few manufacturers with large-scale production of this filter paper in the world, but it is widely used in electronic manufacturing, medical production, aseptic diagnosis and treatment, food processing, animal breeding and other industries. In the high-quality glass fiber purification cotton market, only the glass fiber filter paper required for chip production has a market size of 4.3 billion yuan per year. This demand in the field of integrated circuit manufacturing is more than 1.7 billion yuan. There is also a demand in the field of high-end panel manufacturing reaching 1.8 billion yuan. The demand for medical professional clean rooms exceeds 1.5 billion yuan.
Another fact that cannot be ignored is that, as a local head enterprise, the unique company scale advantage of Shihuan New Materials is becoming more and more obvious. Since 2004, the company has started large-scale construction. Today, the factory covers an area of 33,250 square meters, and the engineering laboratory is 2,000 square meters. At present, the company has a number of glass fiber production lines. It is worth mentioning that media reports in the early days of listing on the New Third Board showed that the daily production of glass wool by Shihuan New Materials was as high as 20 tons to 25 tons.
In recent years, the state has gradually controlled the production capacity of high-energy-consuming industries, and has also made a series of clear regulations on the single-line capacity of the glass fiber industry. As a fine molecule industry in the glass fiber industry, Shihuan New Materials is also within the jurisdiction of the national policy. However, the company follows national policies and strictly enforces energy consumption standards. The subsidiary Haisheng Company will complete the preparations and officially put into production in 2021, and its production capacity will be released normally and quickly.
When it comes to the stage of high growth of industrial demand scale, it means that the enterprise supply chain has officially entered the stage of “comprehensive upgrade”, and the top priority is to reduce costs. Huanxin Materials will focus on procurement as an important part of the company’s cost reduction. According to the company’s latest semi-annual report, the company raised the usual simple transaction procurement to the level of strategic procurement, and reduced the supply chain cost of the entire product production by coordinating the resource advantages inside and outside the company. The latest semi-annual report also mentioned that the company comprehensively controls procurement costs and quality through modes such as “bidding procurement, non-bidding procurement, and centralized procurement”.
On the other hand, in the cooperation model with major suppliers, the company signs long-term strategic orders. After considering the two-factor optimization of “purchasing volume” and “suppliers”, Shihuan New Materials also adopts the methods of inquiry, price comparison, and negotiation for special goods, projects, services and other projects, and uses the game mechanism to reduce procurement processing costs. As another big move for the company to reduce costs – the acquisition of mature enterprises, Shihuan New Materials has acquired Inner Mongolia Jiaruihai Fiberglass Materials Co., Ltd., which has fully mastered the technology of microfiber glass wool processing. The complete industrial chain of equipment has taken a solid step forward.
If a worker wants to do a good job, he must first sharpen his tools. On the whole, the company has strong R&D strength and great investment. The R&D center implements the general manager responsibility system, and the center has various departments under unified management. The majors of R&D personnel cover multi-disciplinary and interdisciplinary majors, and a very professional and young R&D team has been formed. At the same time, Shihuan New Materials has formed a strategic alliance of industry-university-research cooperation with famous universities and scientific research institutions, and often invites experts and professors to the company for technical guidance.
After the completion of the formation of the technical team, according to the development needs, Shihuan New Materials has increased the research and development expenses and technical research of sub-category products. Public data shows that in the first half of this year, the company’s research and development expenses exceeded 5 million yuan, an increase of nearly 70% over the same period of the previous year. And successfully developed a number of core products, including 253 special glass fiber wool for the production of energy storage battery separators, glass fiber adsorption separators, and 475 high-end glass fiber wool for laboratory filter paper, domestic water filter elements, etc. , the company’s product competitiveness has been rapidly improved.
When we review the glass fiber industry cycle, we can see that 2018 was a period of overcapacity in the industry, but when the industry re-emerged in 2020, new energy installations led to a supply and demand gap in the industry. Reflected at the company level, starting from the second half of 2020, the glass fiber market has improved, including the rise in unit prices of ultra-fine glass wool and glass fiber products, the increase in the number of glass wool sales, and the increase in revenue. The trend will be further extended. What is certain is that only companies that insist on long-term preparation can persevere in the opportunities and challenges and achieve final success.
In terms of performance, in 2021, Shihuan New Materials achieved operating income of 273 million yuan, a year-on-year increase of 183.53%, net profit attributable to the parent of more than 65 million yuan, a year-on-year surge of 827.07%, and a return on net assets of more than 80%. The year-on-year growth rate of operating income exceeded 183.53%, ranking fourth among 515 new innovative enterprises. The year-on-year growth rate of net profit attributable to the parent ranks third, and the performance is stronger than 91% of innovation-level companies.
In the future, Shihuan New Materials will continue to focus on emerging fields such as new energy, energy storage, and clean filtration, and continue to expand the company’s territory through mergers and acquisitions of microfiber glass wool companies with core technologies. At present, the industry PE of the company’s new materials is 60-80 times higher on average, and the door to corporate valuation space is open. Under the current economic environment, the comprehensive registration system may be launched at any time, and the company will seize the opportunity to start listing counseling and apply for IPO. It is foreseeable that, under the blessing of a more liquid market, the transfer of Shihuan New Materials will surely bring greater surprises and more returns to shareholders and all sectors of society.