I have a certain understanding of the disposable glove industry, so today I will tell you something dry.
1. Where is the ceiling of the glove industry? Under normal circumstances, if there is no impact of the epidemic, the growth rate of the disposable glove industry is about 5% globally. This growth rate is already relatively optimistic, because the industry itself is a relatively stable industry. This is why, for companies in the disposable glove industry, the valuation given is generally not high, and at most a PE of 10-15 times is very good. Because the growth rate is too slow. Originally a very stable industry, this year due to the impact of the new crown epidemic, this industry has basically been subverted. As you can see, Intech Medical is 10 times the king of A shares this year. Why can it be increased by 10 times, and how much room is there in the future? It is necessary to understand the competitive landscape of the glove industry.
2. There are basically three types of gloves, nitrile gloves, PVC gloves, and latex gloves. Latex gloves are mainly used by doctors for surgery. Since latex gloves are produced in Malaysia and other Southeast Asian countries, the domestic production capacity of latex gloves is basically very small, and there are no large listed companies doing latex gloves, so I won’t talk about it here. Up. Focus on PVC gloves and nitrile gloves. PVC gloves China is definitely the global production center. The Blue Sail Medical family accounts for about 20% of the global production capacity of PVC gloves. The entire Chinese PVC should account for about 85% of the global production capacity. The main raw material of PVC is paste resin + plasticizer ( Bluesail Medical’s controlling shareholder, Bluesail Group’s subsidiary Lanfan Chemicals, produces paste resins and plasticizers. Therefore, from the perspective of the industrial chain, Bluesail Medical must have an inherent advantage in producing PVC gloves, but don’t think about it. Certainly not through related party transactions and then transfer pricing to convey benefits to listed companies, because this related party transaction must have been focused on by the Securities Regulatory Commission when it was listed before, and paste resins and plasticizers are also bulk chemical raw materials. There is something tricky in terms of it is unlikely). The main raw material of nitrile gloves is nitrile latex (chemical products), and more than 70% of the global production capacity of nitrile gloves should be in Southeast Asian countries. In fact, there are not many domestic production lines for nitrile gloves. There have been few domestic nitrile gloves production lines, mainly because domestic nitrile latex manufacturers have few factories, mainly in Southeast Asia. If nitrile latex is shipped in from Southeast Asia, the freight will be too much, and it will definitely not be cost-effective. In recent years, due to the increase of domestic nitrile glove production lines, such as the establishment of nitrile latex production plants such as South Korea’s LG, the competitive advantage of domestic nitrile gloves has gradually increased. This is also a question of whether the chicken comes first or the egg comes first. The development of any industry is inseparable from the development of the entire industrial chain. Let me explain this truth to everyone first.
3. Having said so much, the core point is to tell everyone that whether it is PVC gloves or nitrile gloves, the increase in production capacity cannot be achieved overnight. You can build a mask production line and build a 300-square-meter workshop, but the production line of disposable gloves is basically at least 3 billion and 5 billion. This production line has restrictions on land occupation, environmental protection, heat energy, and raw material procurement. If it is built from a bare land, basically, it will not be completed without a period of 1-2 years. This is the decision. You can see why the price of a mask can go from a hard-to-find mask to a bad street in 5 months. The price of disposable gloves, after rising from the end of May to June, has basically never dropped. The melt blown cloth that gloves must use can cost hundreds of thousands of dollars a ton when it is high, and it can fall to tens of thousands in the end. The core is the supply of raw materials and whether the establishment of the production line can quickly increase the volume. For a manufacturing company like China, to build a mask factory, basically companies with a bit of ability can speed up, but the glove factory is not the case. The key issue is that you just build the production line, and there are related barriers to the production of disposable gloves, processing technology, and production technology. Not anyone who wants to have money can quickly increase production capacity.
4. According to the current development of the new crown epidemic, there is a high probability that the new crown virus will coexist with humans for a long time. Even if the vaccine is released, I estimate that this time frame of high probability will be viewed in 2-3 years. Although Malaysia, such as top gloves or domestic Intech Medical and Blue Sail Medical, are making large-scale announcements to increase production lines, but I judge that the current shortage of disposable gloves in the world will last at least 2 years. time.
5. From the price point of view, before the new crown epidemic, the high price of PVC gloves was basically US$15/1000, when it was low it fell to US$11-12/1000, and the price of nitrile gloves was basically US$20-25. /1000 pcs. The current price of PVC has basically reached 60 US dollars/1000, and the price of nitrile gloves is about 120 US dollars. As you can see, the prices have increased by at least 4-5 times. In addition, knock on the blackboard, even if you have money, you can't buy it now, because all the production line orders have been fully loaded and the production is full. At the same time, although the sales price has risen so much, the purchase cost has basically not increased much. This is why Ingram Medical has increased by 10 times a year, because the company's profit is indeed a year of money earned for 10 years. Interested children's shoes can take a look. For example, the net profit of Intech and Blue Sail Medical from the listing to the present, basically this year can be the sum of the net profit of all years from the listing to the present. It is really a raw material for a low-value consumable industry, and now it has become a high-value consumable industry, with a gross profit margin of over 90%. Judging from the current situation of actual orders, the major domestic manufacturers of disposable gloves have basically arranged their orders for the first half of next year. Even if some manufacturers' new glove production capacity can be released next year, I don’t think it can effectively alleviate the current global shortage of disposable gloves. This is why, I believe that the current profits of disposable glove manufacturers will continue to grow. Moreover, with the release of new production line production capacity, it is tantamount to directly and crudely increasing the performance of listed companies. To put it bluntly, the large truck purchased from the factory is a cart of gloves, and the financial side is a small cart for cash. Don't be too happy to make this money.
6. Speaking of the future, there is no doubt that the new crown epidemic has or is gradually changing our lives. Many people will overestimate the impact of one year, but underestimate the impact of the next 3-5 years. The new crown virus has changed to some extent This has helped us to receive education, travel abroad, and health protection. To be sure, the demand for disposable gloves, starting from this year, the global growth will certainly not be around 5% per year before. As everyone develops healthy habits, including mandatory use requirements in some service-oriented industries, it will definitely change the global competitive landscape in all aspects. Here, knock on the blackboard again. We are still a little confident. For this kind of disposable gloves, especially nitrile gloves, there were relatively few in China before, but now with Intech Medical and Blue Sail Medical building production lines on a large scale, I believe that in the next few years, the entire The competitive landscape of the global industry of sex gloves will also change. The domestic production lines are absolutely the latest, the most efficient, and the best automated. For such low-value consumables, the greater the production capacity and the lowest unit cost, the more competitive. I am more optimistic about the competitiveness of Intech and Lanfan in the global disposable glove industry after the industry's reshaping. This kind of industry growth and the improvement of global competitiveness are our strengths. This kind of industry ceiling improvement can truly enable companies in this industry to have a brand new improvement and growth. So don't look too close, always consider how to digest it if there is no epidemic situation after expanding production capacity. To put it bluntly, in the manufacturing sector in China, in addition to special cards such as chips, this kind of disposable gloves, as long as we want to do, what are the countries in Malaysia, how can we have the ability to break the wrist with us? . In fact, the pattern of this industry will always change, but the epidemic served as a catalyst to advance the battle between the leading domestic disposable glove companies and the global disposable glove leading companies by five years.
7. Is Blue Sail Medical or Intech Medical better? Each company has its own characteristics. In terms of product layout, Blue Sail is a glove + high-value consumables. Because high-value consumables, especially heart stents, are facing the national gathering of high-value consumables, many investors are worried about this impact. This year is also the third year of Blue Sail's acquisition of Baisheng. The pressure on gambling performance is still there. Whether it will affect the impairment of high goodwill is a point of concern. This is why Intech can increase tenfold. , Lanfan only doubled this year. Assuming that Bluesail has not acquired Bosheng International before, I believe that this year it will rely on the glove business, and the market value of Bluesail will definitely increase by 10 times. It must be higher than Intech. But with the addition of Baisheng International, everyone is worried, so the rise is slow. But here is a point. It depends on how long your investment period is. I believe that if we take a 3-5 year long-term perspective, Lanfan's current layout of high-value consumables and the advantages of low-value gloves will gradually expand. This will take time. After verification, it depends on the abilities of the chairman of Lanfan Liu Wenjing, whether he can play in both industries, this is definitely a test. There are really not many bosses in a listed company that can really transfer the two main businesses. It is believed that Liu Wenjing always uses the great wisdom and delicacy of women to truly make Lanfan Medical into a low-value + high-value consumables leading company with dual main businesses.
As for Intech Medical, there is no doubt about anything, just looking at performance, it is definitely the most beautiful boy in the whole street, and there is no uncertainty. I estimate that the probability of Ingram Medical’s single-quarter profit in the third quarter should be 2.5-3 billion. You can see for yourself, all A shares, a year can build 7 billion companies with net profits, what is the market value. . Therefore, buying Intech is definitely buying certainty. As for 3 years later, how about it. It depends on the general situation of Intech’s boss Liu Fangyi, whether he can seize this once-in-a-lifetime opportunity to quickly expand the company.
JUBAO is manufacturer to research and development,design and produce machines of gloves,balloon and condom. Mainly in balloon printing machine,production line for glove,glove half-full dipping,latex condom dipping and latex balloon dipping,glove dotting and printing machine, surgical glove out wrap/inner paper packing machine,condom packing machine and other relevant supporting equipment products.
Finally, to summarize, what you should buy is the future when you buy Bluesail, and what you buy from Intech is now. With different investment concepts and different choices, there has never been right or wrong in the capital market. The rest, just wait and see. Let the stock price and the market falsify it.