Interpretation of aerospace-based functional coatings company-AVIC New Materials

The previous capital increase of AVIC New Materials

Relying on the background of the Aeronautical Materials Institute, AVIC Advanced Materials has the inherent advantages of operating military products.
At present, aviation and military coatings steadily contribute about 20 million in revenue each year, accounting for about 5-10% of the company's total revenue.

The main products "Baimu" special anti-corrosion primer and topcoat are used on the surface of the aircraft; the fuel tank coating is used for antistatic protection of the surface of the fuel tank, and the anti-corrosion primer and antistatic coating are used for the internal anti-corrosion of the integral fuel tank of the aircraft; multiple types Radar radome protective coating system.
The military market has relatively stable channels and high expansion barriers.
We judge that this sector will remain stable in the future.

2.
2 Special functional coatings: military-to-civilian business platform

The functional coating segment is the segment that contributes the most profit to AVIC New Materials.
The current annual revenue contribution is more than 60%.
The main application areas are the application of petroleum and petrochemical, steel structure, concrete and other facility protection.
We believe that it has certain technical advantages in the field of functional coatings, especially bridges and petrochemical anti-corrosion projects.
The sector is expected to develop steadily in the future.

2.
3 Environmental protection coatings: the focus of future growth

The environmental protection coating business may become a new growth point for AVIC New Materials, which is mainly used in food-grade coatings, municipal water engineering pipelines, beer cans, etc.
, including water-based series, solvent-free series, self-cleaning fluorocarbon series and other varieties.
We judge that AVIC Advanced Materials relies on its technological advantages to deploy environmental protection coatings, and it is expected to become an important growth point for its performance in the future.

    3.
The fixed production capacity is gradually released, and the performance growth rate is expected to rise.

We believe that the future performance growth of AVIC Advanced Materials will mainly come from the release of production capacity, the further expansion of channels and the increase in market share brought about by the enhancement of product innovation competitiveness.

3.
1 Gradual release of fixed capacity increase

AVIC New Materials has an existing paint production capacity of 5,000 tons.
In 2013, 68.
34 million yuan was raised through a fixed increase in the construction of a 70,000 tons/year advanced functional coatings research and development center project.
At present, most of the base construction projects are basically completed.
We judge that the production capacity will be in 2014 The construction will be completed gradually by the end of the year and is expected to contribute gradually in 2015.
Among them, the 881 series coatings are mainly used for food grade and bridge anticorrosion.

3.
2 Promote the construction of marketing system and expand new product categories

We believe that although AVIC Advanced Materials is a scientific research institute restructuring, it has certain advantages in cooperation with government departments and institutions based on the background of shareholders.
At present, it has formed a three-tier marketing with the Beijing headquarters radiating 7 regions across the country and the regional center radiating surrounding offices.
Management and control system, and the formation of a model to drive material sales with engineering business.

In terms of new products, using the advanced technologies of the Aeronautical Materials Institute, such as tin foil coating technology, we judge that the company, as the only industrialization platform of the Aeronautical Materials Institute, is expected to realize the continuous commercialization of its technical reserves.

    4.
Introduction to the coating industry: opening a new blue ocean

Coatings refer to materials that can be decorated on the surface of an object to bond well with the base material and form a complete and tough protective film.

According to different dispersion media, coatings can be divided into water-based coatings, solvent-based coatings and so on.
According to different coatings and uses, coatings can be divided into architectural coatings, functional coatings, anti-corrosion coatings, wood coatings and so on.

4.
1 Functional coatings occupy major downstream markets

According to a report by the International Coatings and Ink Council (IPPC), global industrial coatings production accounted for about 57% in 2011, and architectural coatings accounted for about 43%.
Industrial coatings mainly include anti-corrosion coatings in many fields, including metal structure anti-corrosion, marine facilities and ship anti-corrosion, container, engineering equipment anti-corrosion coatings, etc.
, and are the pillar industries of the entire coatings market.
The upstream of the coating industry is mainly the chemical industry, and the downstream is the construction, automobile and other industries.
The prosperity level of the downstream industry determines the growth trend of the coating fine molecule industry.
And if the downstream of the coatings market is split, functional coatings account for 58% of the global market share.

4.
2 The domestic coatings market is growing rapidly, and there is a large room for import substitution

In recent years, with the opening of my country's infrastructure construction and urbanization process, my country's huge paint market has become the focus of competition among the world's major paint companies.
According to Freedonia Group of the United States, the total output of China's coatings industry reached 13.
0334.
9 million tons in 2013, and it has become the world's largest paint producer and consumer.

As of October 2014, the total output of my country's coatings industry was 13.
37557 million tons, an increase of 26.
28% compared to the same period last year.
The increase in demand mainly came from railways and high-speed railways, oceans and ships, automobiles, furniture, home appliances, mechanical equipment, and electronic equipment.

In sharp contrast with the output and consumption potential, the domestic paint manufacturing industry is still in its infancy.
On the whole, the overall gross profit margin of China's coatings industry is hovering at the level of 15-20%, and there are very few well-known brands among the nearly 2,000 coating manufacturing companies.
There are only two Chinese companies among the top 50 coatings companies in the world.
Compared with foreign advanced coating companies, domestic companies still have a considerable gap in economic strength, product quality, scientific research level, management foundation and marketing methods.

4.
3 Channel is king, the industry trend of integrated service providers

The paint itself is only a semi-finished product, and the coating formed by the paint is what the user really needs.
After removing the product, the manufacturer also needs to provide customers with technical services such as painting and guide customers to use the paint correctly.
Therefore, the importance of intangible assets such as brands, channels, and services in the coatings industry is more prominent.

4.
4 Environmental protection coatings become a new direction for future development

In conventional solvent-based coatings, solvents account for about 30% to 50% of the total volume.
The volatilization of toxic solvents causes great harm to the environment and human health.
Countries around the world have successively formulated relevant regulations to limit coating VOCs (volatile organic compounds).
Usage.
There are currently only three architectural coatings VOC emission standards in China, and there is still a gap compared with developed countries, and there are no relevant standards in the field of industrial coatings.

We believe that the development direction of low-VOC coatings is mainly water-based paints.
According to data from China Coatings Industry Association, in 2013, water-based paints in developed countries such as Europe and the United States accounted for 80% to 90% of the paint market, while water-based paints in China accounted for less than 10% , Environmental protection pressure is forcing the development of water-based coating products.
(Source: Global Coatings Network) (For more information, please log in: Global Coatings Network http:// )