Under the background that green development has become a global consensus, A-share listed companies have accelerated the layout of low-carbon environmental protection, in order to seize the development opportunities of the times and achieve new breakthroughs in business performance.

On the evening of April 28th, Folai New Materials (605488.SH), a leading company in the functionally coated composite industry, disclosed the plan for a public offering of convertible bonds. In order to enhance the core competitiveness and enhance profitability, the company plans to publicly issue convertible corporate bonds to raise no more than 445 million yuan for new environmental protection pre-coated functional materials construction projects and supplementary liquidity.

New materials for environmental protection lead the green development of the industry.

Fulai New Materials is mainly engaged in the research and development, production and sales of functional coated composites, including advertising ink-jet printing materials, label printing materials, electronic-grade functional materials and so on.

In recent years, the state is committed to building a resource-saving and environment-friendly society, issued a series of related policies, and put forward new requirements for green environmental protection for various industries. Fulai New Materials actively responds to the policy requirements of "double carbon" and "plastic ban", takes "green environmental protection and sustainable development" as a strategic orientation, constantly ploughs the main industry, and extends the functional base film, adhesive, environment-friendly water-based pre-coated packaging material industry.

According to the announcement, the total investment of the Fulai new material fundraising project "New Environmental Protection pre-coated functional Materials Construction Project" is about 402 million yuan, of which about 312 million yuan is to be raised. The project plans to build a new production workshop and three-dimensional warehouse, and purchase advanced production and storage equipment such as advanced coating machine production line, cutting equipment, environmental protection equipment and automatic three-dimensional storage equipment. After the construction is completed, the company will add 370 million square meters of environment-friendly water-based pre-coating packaging materials and 117 million square meters of environment-friendly high-precision display materials every year. It is estimated that the overall internal rate of return of the project is 19.97%, and the payback period of investment is 6.64 years.

In addition, the company plans to use about 134 million yuan to raise funds to supplement the liquidity related to the company's main business, to meet the liquidity needs brought about by the rapid growth of the company's operating scale, and to provide working capital support for the company to further expand its production and operation scale.

Fulai Xincai said that this investment project is in line with the relevant national industrial policies, industry development trends and the overall strategic development direction of the company in the future, has good market prospects and economic benefits, and is conducive to enhancing the company's comprehensive competitiveness.

At the same time, through the implementation of the project, it will further enrich the company's product structure, optimize the company's business, consolidate the company's position in the industry, provide the company with a new profit growth point, and help to improve the company's profitability and achieve sustainable development. safeguard the long-term interests of shareholders.

The market has a broad prospect and is expected to enjoy the policy dividend.

Since the implementation of the "plastic restriction order" in 2008, the relevant policies of plastic restriction and prohibition have been continuously increased. In January 2020, the most stringent plastic restriction order in history was issued, which clearly put forward the requirements of prohibiting and restricting the use of shopping bags, disposable tableware and time-advancing nodes in four major areas, such as shopping bags and disposable tableware, and build a policy system covering the whole life cycle of production, circulation consumption and end-of-life disposal.

Industry insiders pointed out that from a policy perspective, it is a general trend for environmentally friendly packaging materials to replace non-degradable plastic products, while the explosive growth of takeaway catering market and the rapid growth of instant catering industries such as tea and baking have also brought a huge demand for food packaging. According to the forecast of iResearch, by 2025, the market scale of degradable takeout boxes in China will reach 46.5 billion yuan, the market space is huge, and the prosperity of the industry is expected to continue to improve in the future.

It is worth mentioning that the environmentally friendly water-based pre-coated packaging materials produced by Folai New Materials this fund-raising project is aimed at the field of food packaging. And another large production capacity-environment-friendly high-precision display materials, the rapid expansion of the application in the field of home and image printing, also has a broad market prospect.

It is reported that the environment-friendly high-precision display material belongs to digital inkjet printing material, which is mainly used in decoration, beauty decoration and other fields. It is a kind of digital inkjet film material with special coating. Compared with traditional products, high-precision display materials do not have a negative impact on human health, can effectively reduce carbon emissions and VOCs emissions, in line with the requirements of national industrial policy development, in line with the national reform requirements of building an environment-friendly society. The application field of the company's high-precision display materials specifically includes household decoration films, image printing materials and other products.

In recent years, the diversification of downstream market application scenarios has spawned and driven the steady growth of the digital inkjet printing materials market. The rapid development of home decoration market and the technology replacement of image materials market have become an important driving force to promote the development of high-precision display materials.

In terms of home decoration, China's furniture decoration and furniture market will reach 4.833 trillion yuan in 2024, compared with 2.167 trillion yuan in 2014, with an average annual compound growth rate of 8.35%. In terms of image materials, the image paper using high-precision display materials for digital inkjet printing is in line with the development trend of the industry, and has a large market space in the process of replacing the traditional silver salt printing method.

In addition, the two major new production capacity of the above-mentioned fund-raising projects belong to the diversified application segments of the traditional business of Fulai New Materials, which are similar or coincident with the technology, raw material supply and sales channels of the company's existing products. Based on the company's profound R & D technology precipitation, rich production experience, perfect production management system and stable product quality level, the smooth implementation of the project in the future has a solid guarantee, and after it is completed and reaches production, relying on the original customer resources and product advantages, the company is expected to achieve efficient business layout, access to relevant packaging materials and large-scale fast food enterprise customer resources and quickly occupy market share.

Steady growth of business performance to be a "researcher of new material value"

Folai New Materials has been in the field of functionally coated composites for 16 years, but in the capital market, the company is still a "recruit" who has been on the market for less than a year.

2021 is a milestone year for Fulai Xincai. The company successfully landed on the Shanghai Stock Exchange, obtained richer resources and broader development platform and space, and continued a steady growth in revenue and net profit during the period. and both reached record highs: revenue 1.715 billion yuan, an increase of 35.16% over the same period last year; and home net profit of 127 million yuan, an increase of 5.92%.

During the reporting period, the company timely seized the opportunity of industry development, made a good business layout ahead of time, and continuously promoted the smooth development of all kinds of work. In July, the company joined Shanghai Carbonate New Materials Co., Ltd., taking glue R & D and sales as a new business direction. At the end of September, the company held Yantai Fuli New material Technology Co., Ltd., officially entered the functional basement membrane industry. Through the horizontal and vertical comprehensive layout, it will help the company to achieve the integration of the industrial chain, effectively reduce production costs, ensure a stable supply of raw materials, and greatly improve the comprehensive competitiveness of the company's products.

Fulai Xincai has been committed to providing customers with competitive products, quality service, and convenient and fast supply channels. In 2021, the company will actively expand its sales network and set up three new subordinate companies, further enriching the layout of the national sales network. While actively expanding and strengthening the domestic market, Fulai has entered the international market with a broader field of vision. at present, the company's related brands have established a strong brand influence in Southeast Asia, Europe and the United States and other regions.

In addition, in order to meet market and policy needs and achieve environmentally friendly, lightweight, multi-functional products and diversified application scenarios, Fulai New Materials continued to increase its R & D investment in 2021, and R & D costs increased by 38.75% compared with the same period last year, and more than 30 key projects were completed. Focusing on functional base film, water-based coating, new equipment and new technology, the company strives to become a leader in scientific and technological innovation and leading the green development of the industry.

Looking forward to 2022, Folai Xincai said that the company will continue to dig into the advertising and packaging business market, ensure steady growth in performance, continue to strengthen technological innovation, explore digital construction, and so on. The company also mentioned that it will focus on exploring the environment-friendly water-based pre-coated packaging material industry, seize the great opportunities brought about by the national environmental protection policy, and will select several key tracks in the field of electronic-grade functional materials and set up corresponding business departments. strive to achieve major breakthroughs.