Blue Mountain Tunhe sprints for IPO!

On June 27, 2022, the Shenzhen Stock Exchange officially accepted the IPO materials of Xinjiang Blue Mountain Tunhe Technology Co.
, Ltd.
(hereinafter referred to as "Blue Mountain Tunhe" or the "Company"), and the company plans to be listed on the Shenzhen Stock Exchange's Growth Enterprise Market
.

Lanshan Tunhe takes the integrated industrial chain of fine chemicals and high-end chemical new materials as its main business.
Since its establishment, it has continuously consolidated the hardware foundation of the industrial chain and built the upstream and downstream integration of "BDO-PBS series biodegradable materials/PBT/PTMEG/TPEE" The product line covers fine chemical basic raw materials, biodegradable materials, new chemical materials, and new energy-saving and environmentally friendly building materials
.
 

Through years of development, the company has established a good reputation in the industry with its stable product quality.
During the reporting period, the company's main business income was 2,367,835,800 yuan, 2,839,158,100 yuan and 6,517,931,200 yuan respectively
.
 

Relying on Xinjiang's advantageous resources, the company has been closely following the development direction of high-end and green development over the years, and the industrial scale has continued to expand
.
The company's BDO production capacity is 208,000 tons per year, which is in the forefront of the country
.
As one of the earliest domestic enterprises to deploy biodegradable materials, the company has a comprehensive production capacity of 125,000 tons/year of PBS series biodegradable materials and PBT resin, leading the industry
.

The funds raised from this offering will be invested in the following projects:

As of the signing date of this prospectus, the issuer's shareholding structure is as follows:

During the reporting period, the company's main business income consists of the sales income of BDO, PTMEG, PBS series biodegradable materials, PBT, PET, EPS, PVC profiles and a small amount of other products, as shown in the table below
.

The company's main products are rich in types.
Among them, products with higher output or income - BDO, PTMEG, PBS series biodegradable materials, PBT, PET and energy-saving and environmentally friendly building materials industry characteristics and development trends are analyzed as follows:

Fine chemical basic raw materials - BDO industry

In 2021, the domestic BDO supply capacity will be 2.
183 million tons.
Driven by the strong downstream demand, the operating rate of the BDO industry has reached a historical high level in the past ten years
.
But at the same time, the national policy of "double control of energy consumption" limits the disorderly expansion of production capacity, resulting in a tight balance between the supply and demand of BDO
.
The historical price of BDO shows that the relationship between supply and demand is the main factor affecting the price fluctuation of BDO
.
From 2012 to the first half of 2020, the BDO market price continued to be sluggish, hovering around RMB 10,000/ton for a long time
.
From the second half of 2020 to 2021, due to the enlargement of downstream spandex demand and the gradual release of production capacity and demand for biodegradable materials, BDO products will continue to be in short supply, and prices will continue to rise and run at a high level, with a high point exceeding 30,000 yuan / ton.
The annual average price exceeded 25,000 yuan/ton
.

PBS series biodegradable material industry

PBS series biodegradable materials include PBS resin, PBAT resin, PBSA resin and other degradable products.
At the beginning of 2020, the country will promote the further upgrading of plastic pollution control, and various places have successively introduced "plastic ban" implementation plans.
With the support of national policies, the demand is increasing
.
At the same time, because the company independently produces BDO, there is a cost advantage in the industry chain, so the gross profit margin of PBS series biodegradable materials is relatively high during the reporting period
.
In 2020, the gross profit margin of PBS resin has declined, mainly due to the higher price of PBS resin compared to PBAT resin, limited market demand, lower selling price, and rising unit costs, resulting in a decrease in gross profit margin
.
In 2021, with the implementation of the "plastic ban" plan, PBS resin has the characteristics of convenient processing, good heat resistance, and high stability.
The market demand continues to expand, the price rebounds, and the unit cost increase is not as high as the price increase, resulting in an increase in gross profit margin
.
 

The growth rate of demand for PBS series biodegradable materials mainly depends on the implementation of policies and the speed of replacing traditional plastics
.
With the advancement of product production technology, reducing production costs and continuously improving product performance, biodegradable materials can be widely used in fields such as agricultural mulch films that have not yet been replaced on a large scale, resulting in an unexpected increase in downstream demand
.
Benefiting from the policy support and good expectations of the industry, companies have increased their investment in biodegradable materials and planned to increase their new production capacity
.

From 2020 to 2021, the domestic production capacity of PBS and PBAT will increase from 284,000 tons/year to 381,000 tons/year, and the industry will achieve great development
.
According to the statistics of the China Petrochemical Federation, it is expected that 620,000 tons of production capacity will be completed and put into operation in 2022, but the actual production of the new capacity will be subject to the supply of upstream BDO and other major raw materials in the future
.
Therefore, companies with the advantages of an integrated industrial chain in the industry will have more advantages in terms of raw material security and production costs
.

The price of PBS series biodegradable materials is affected by various factors such as cost and supply and demand
.
Due to the small output of PBS, the average price in 2017-2020 is around 30,000 yuan/ton
.
In 2021, affected by factors such as cost price fluctuations, import and export, the average annual price will rise to 40,029 yuan/ton
.
The average price of PBAT in 2017-2020 is around 22,125 yuan/ton, and the profitability of the product is stable
.
In 2021, the price of PBAT will increase slightly, with the annual average price of 24,178 yuan/ton
.

During the reporting period, the production capacity, output and sales of the company's main products are as follows:

Analysis of gross profit margin of main products

BDO

PBS

PBAT