A Unique Play in Engineering Plastics and “Green Materials”
The “green material boom” is coming, led by Sincerity Applied Materials Holdings Corp (OTC: SINC), a high-tech manufacturer of plastic resins, alloys, plastic sheets, and thermoformed plastics. The company has been developing category-defining products for 30 years now, delivering performance-focused materials that we now see touching every aspect of our lives, from everyday plastic utensils to packaging materials, to the engineering plastics needed for computer chip production, AI devices, 5G and more.
With its growing portfolio of performance-focused engineering plastics and innovative environmental polymers that reduce manufacturing and distribution waste, SINC is positioned to supply much of the world with some of the most ubiquitous manufacturing materials. The company currently serves a base of 900 commercial customers across the world today, with big plans to push that number into the thousands.
Key Investment Considerations
Addressing Universal Manufacturing Challenges – The company is upgrading essential materials within the supply chain, ecommerce, everyday cutlery, and the necessary engineering plastics which currently have no alternatives.
Actively Expanding Globally – Sincerity entered an acquisition agreement with Simcor Materials Technology in 2021, a Chinese manufacturer of various plastics, to anchor its strong base in China. The move has the company in a stronger position for its targeted expansion into US and European markets.
Positioned for Green Materials Boom Growth – The company’s biodegradable range serves companies and regions where traditional disposable plastics are banned. As we’ll point out later, the list of such places is growing.
Innumerable Market Applications – The market applications for SINC are nearly endless. The acquisition of Simcor, for example, positioned the company to supply anti-static plastics to computer chip manufacturers, it will provide materials for 5G upgrades, Electric Vehicles, AI devices and many other aspects driving humanity’s tech evolution. SINC also develops innovative packaging used to transport produce. Imagine all the uses in between those two industries are lying in front of SINC.
Positioned for a NASDAQ Uplisting – SINC is on the road to satisfying NASDAQ small cap criteria. Early movers have an opportunity to ride the uplisting Sincerity has targeted and is aggressively pursuing.
The Future of Engineering Plastics Is the Future of Humanity
Semiconductors. Electric Vehicles. Renewable energy. The expansion of 5G connectivity. Medical devices. These are just a handful of tech-focused products or components that are driving us into the future, and they all fuel the growing necessity for engineering plastics. Demand isn’t expected to falter, either. Mordor Intelligence valued this market at 90 billion in 2020 and projected a CAGR of more than 6% between 2022 and 2027.
This market outlook plays heavily into SINC’s plans for the future, including the 2021 acquisition of Simcor Materials Technology Ltd, a manufacturer of performance engineering plastic resins, alloys, plastic sheets, and thermoformed plastics, as well as establishing a a new R&D and production center in Changzhou, China. The 5,800 square meter facility put SINC in the same neighborhood as EV, PV, 5G Material, and the Robots production center in Changzhou, and enables the company to meet demand in the booming Chinese market as well as position it for strong global expansion into the US and European markets.
Currently, the company’s medical grade engineering plastics have been vital to China’s efforts to combat the COVID-19 pandemic. SINC’s medical grade plastics have been used in air purifiers, face masks, vaccine production, COVID-19 testing kits, and more, serving as a prime example of the value of performance plastics today and into the future.
Leading the “Green Material Boom” Is a Multi Billion $ Opportunity
The simple materials, utensils, and tools that surround us in everyday use are undergoing an extreme makeover. New norms like plastic bans, swapping out plastic straws for cardboard ones when we pick up take out orders, or having our food delivered in environmentally-friendly packaging, and even the proliferation of bans on single-use plastics are signs of the earth-conscious times that grab everybody’s attention.
Some people hate the changes, some people love them. Meanwhile, many Manufacturers across the planet are focused on swapping those same everyday tools and utensils out for green upgrades — the environmentally-friendly options like biodegradable or compostable plastics and other materials. However, none of this is possible on a large scale without quality products replacing the status quo, from packaging materials to utensils, along with developing innovative new use applications. This leaves us with a growing market opportunity worth $23.3 billion by 2026 in biodegradable plastics alone
Focused on Two Global Service Sections
Concerning its development of “green materials,” SINC has distilled its market opportunity down to two major manufacturing sections, which will make them active participants in the global effort to deliver biodegradable polymers:
Material innovation. There is an urgent need to fill the gap between banned or harmful materials and biodegradable upgrades across the world. By investing in and expanding their technology, SINC is expanding biodegradable raw material supply capacity.
Material Application Innovation. Just how the world applies its most innovative new materials will have a massive impact on the planet’s health and manufacturing in the future. There are opportunities to reduce food waste and increase logistics efficiency, which the company is currently tackling with its unique ventilated film packaging.
Innovation in Packaging: Massive Value in Tackling Food Waste
Everything that is manufactured and shipped is packaged. Everything. And when it comes to perishable things like produce or meat, how those items are packaged is critical. Logistics are of the utmost importance and any inconsistencies can lead to obscene levels of food waste across the world. In fact, they already do.
The Modified Atmosphere Packaging market is expected to reach $18.28 billion in market value between now and 2026, which Sincerity is positioned to disrupt with their unique VentaMax Breathable Stretch film. It is the kind of material innovation that can impact the entire supply chain at-large.
Ventilated holes are needed in the packaging film used to transport most of our perishable foods. This is key in preventing spoilage, as moisture build up can easily cause foods to spoil. Or consider products that must be wrapped at high temperatures, which requires ventilation in order to avoid condensation build up that also leads to spoilage. However, most of the packaging films used currently aren’t strong enough to consistently stand up to the tasks of travel. That leaves us in between a rock and a hard place, where the alternative to weaker packaging materials is using films with no ventilation at all.
Sincerity has combined both ventilation and wrapping strength with its unique VentaMax Breathable Packaging film. Its breathability dramatically reduces spoilage, while also offering a boost to logistics, as refrigerated and frozen products both cool down and freeze quicker.
“It has the strongest strings we’ve ever put in a ventilated stretch, precisely designed ventilation holes. This yields a remarkably strong, high air flow wrapping,” says CEO James Zhang.
As far as the bottom line is concerned, MAP innovation can and will help businesses. A study by Mordor Intelligence found that the use of MAP packaging for bananas alone decreases waste from 5% to 1% in winter and an astonishing 15% to 2% in summer.
The Growing Popularity of Plastic Bans
Just how big of a deal are plastic bans? The NRDC estimates 300 million tons of plastic are produced each year. While plastic itself isn’t inherently bad, the single-use plastic products that make up nearly half of our total plastic production pose a noted threat to environmental issues. And this sector is evolving fast, with a strong need for quality materials that can serve as viable replacements to the status quo.
There is actually growing momentum behind an International Treaty on Plastic Pollution, with 88% of adults across 28 nations approving of an agreement that would significantly diminish our use of single-use plastics. The same research by IPSOS found that 85% of adults also believe manufacturers should be responsible for reducing, reusing and recycling plastic packaging. This is where SINC very clearly steps in to save the day for these manufacturers across the globe. You have likely heard plenty already about our problems with plastic. In 1950, the world produced just two million tons of it. That number has grown and continues to grow exponentially, with approximately 8.3 billion tons of plastic existing in2021. And existing is a key word here because that number still includes most of those two million tons from 1950, as plastic does not actually break down entirely. This has left us with a grim fate: an estimated 53 tons of plastic pollution will be left in our oceans by 2030.
Eliminating all plastic use and plastic production isn’t likely. Plastics are too useful to simply eradicate from all of manufacturing. And that has driven the need for reliable alternatives to the status quo of the past few decades. Sincerity specializes in precisely this as early investors in PLA, PBAT, PHA, PCL, and PBS — materials which position the company to lead the “green material boom” in cutlery, packaging, agriculture, automotive, medical, and textile industries. While zero plastics may not be feasible, Sincerity makes zero pollution plastics very possible, as the alternative materials they specialize in are able to fill the biodegradable or compostable demands that will inevitably be put on manufacturers.
What’s the actual value of all this? In 2021, the global market for plastic alternative packaging was just over $71 billion and it’s expected to reach $78 billion in 2022. By 2026 that number is estimated to climb near $100 billion, at approximately $96.91 billion at a CAGR of 5.5%. And this is just taking a glimpse at the market for packaging alternatives. SINC is addressing that global need while also developing polymers that can and will be applied in various other industries.
There are a number of evolving factors across the globe that give Sincerity Applied Materials exciting potential. They provide materials the world won’t stop relying on in manufacturing, healthcare, tech, packaging, and more. However, there’s no denying these same materials need the sustainable green upgrade SINC is offering.
SINC lie in the global changes happening around every corner. Take the COVID-19 pandemic, for example. As we pointed out, SINC’s medical grade nylon has been used to support China’s healthcare response to the virus. Demand called on the company to upgrade its output of the material. But COVID-19 has impacted our plastic reliance on everyday plastics as well. Consider the food delivery boom of the past two years.
A 2021 study found that the massive shift to online food delivery (OFDS) created an unexpected and unsustainable level of plastic consumption. Lockdowns ushered in an impressive alternative revenue stream of online food delivery services, which are expected to continue thriving even as restaurants have opened their doors back up.
“The COVID-19 pandemic has led to increased consumption and disposal of plastic-based products such as face masks, face shields, and personal protective equipment (PPE), wherein the increased consumption can translate to an additional 280 tons of medical plastic waste per day,” researchers wrote, also including food packaging from OFDS in their totals.
The same study says 427 million people will be active in this platform-to-consumer business model by 2024, where SINC holds its strongest market presence already.
“There is an urgent need to implement interventions that seek to promote the cleaner and responsible consumption of plastics associated with OFDS even beyond the pandemic since this type of food service is anticipated to further bloom due to enhanced urbanization,” they wrote.
What gives Sincerity true blue chip potential is that its work doesn’t just touch one industry. SINC can positively impact online food delivery as much as healthcare, renewable energy, and the list goes on.
Yiwen Zhang, CEO, President, and Chairman of the Board
Yiwen Zhang has served as Sinerity’s CEO, President, and Chairman of the Board since September, 2017. He founded Sincerity Australia Pty Ltd in 2005 and has served as general manager since its inception. He has more than 10 years of experience in the plastics and packaging industries, including well-developed relationships with significant packaging groups.
Chris Lim, CFO
Chris Lim has served as CFO since 2018. He has close to 20 years of professional Chartered Accounting experience. He holds a Bachelor of Commerce Degree from the University of Melbourne. Chris has served as Associate Director with Big 4 and Mid-Tier accounting firms.
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What we were paid to advertise the Profiled Issuers.
The details of our compensation and the period of the Campaign is set forth below.
Name of Issuer & Ticker Symbol - Sincerity Applied Materials Holdings Corp. (SINC)
Amount & Form of Compensation - $200,000 in Restricted Common Stock
Who Paid for the Campaign & Position with Company if any - Sincerity Applied Materials Holdings Corp. (SINC)
Period of Campaign - 3/29/2022 - 3/29/2023
What securities of the Profiled Issuers do we hold?
The positions we hold of the Profiled Issuer are set forth below. We plan to sell these securities during the Campaign.
Name of Issuer & Ticker Symbol - Sincerity Applied Materials Holdings Corp. (SINC)
Number of Shares We or our Affiliates Hold - 253,164
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