Viscose staple fiber industry investment report: demand for viscose in textile fabrics continues to be high

Mid viscose staple rally will continue. The upward factor of this viscose cycle is the superposition of the new capacity vacuum period and the steady growth of downstream demand. Since 2014, the growth rate of production capacity has gradually slowed down. Until Q3 2017, the growth rate of production capacity in the industry was less than 5%. The slowdown in the growth rate of viscose staple fiber production capacity corresponding to the rapid increase in demand, short stick apparent consumption in 2016 grew 9.3%, and from January 17 - May 25% growth, continued to demand It is good to directly optimize the industry supply and demand pattern. At present, the company's weekly operating rate has reached 94%, the inventory days are about 0-2 days, the supply is tight, and it is expected to accelerate the short-term price increase.

The medium-term forecast for the textile and apparel industry showed a recovery in the industry, with the textile sector slightly exceeding expectations. There are 45 textile and apparel listed companies in the downstream of chemical fiber. There are 27 growth forecasts for this year's mid-term report. There are 7 companies that continue to make profits and turn losses. The performance has dropped by 9 and there is no uncertainty. The industry has recovered. Among them, the textile sector continued its high level of prosperity in 2016. With the recovery of overseas economy in 2017, the growth of downstream orders was more certain, and the performance growth was slightly higher than expected. For example, Huafu Color Spinning announced a 30%-60% increase, Xinye Textile Preview Increase by 30%-50%.

The increase in textile production is in line with the good performance of the domestic market. According to the data released by the National Bureau of Statistics, in the first five months of this year, the cumulative output of domestic cloth was 20.8 billion meters, an increase of 4.2% year-on-year. The cumulative output of yarn was 16.577 million tons, an increase of 4.7% year-on-year, and the output of textiles increased. Corresponding to this is the stable performance of the domestic market. In January, March, April and May this year, the retail sales of 50 key large-scale retail enterprises in China increased by 17.8%, 3.1%, 5.5% and 4.1% respectively.

The demand for viscose in textile fabrics continues to be high. We observe 12 kinds of textile fabrics (cotton, pure hemp, polyester , polyester, polyester, polyester , polyester, polyester, viscose, viscose, hemp, nylon) of Keqiao Textile's total prosperity index. According to the total prosperity index, it has been found that since 2016, the two booms of polyester and viscose have far surpassed other fabrics, and the demand for viscose continues to be high.

Reiterate our recommendation for viscose. (1) The demand for high prosperity, viscose fabrics have a good atmosphere. (2) The supply is tight and the stock is gradually digested. The weekly operating rate of sticky short-term enterprises reached 94%. After a wave of rebounds, the inventory days have dropped from 11 days to the current 0 days, and supply and demand have tightened further. We believe that with the low price of viscose in the early stage, the stocks in the off-season will gradually digest, and the coming of the peak season is expected to continue to boost market sentiment. Viscose is expected to enter a continuous upward channel. (3) It is recommended to pay attention to Sanyou Chemical (500,000 tons), Zhongtai Chemical (390,000 tons), Nanjing Chemical Fiber (128,000 tons) and Aoyang Technology (229,000 tons); each EPS increase of 1,000 yuan / ton EPS elasticity is 0.16 Yuan, 0.13 yuan, 0.27 yuan, 0.23 yuan. Sanyou Chemical expects EPS to be 0.87, 0.92 and 0.97 yuan respectively for 17-19 years, and 11+ times, 11 times and 10 times for PE respectively, maintaining “Buy” rating; Zhongtai Chemical expects 17-19 years EPS They are 1.00, 1.15, and 1.46 yuan respectively, and the corresponding dynamic PEs are 13 times, 11 times, and 9 times, respectively, and maintain the "Buy" rating.