\u3000\u3000 Zhuzhou Kibing Group Co.Ltd(601636) (601636)
Event:
The company released the performance forecast for 21 years and is expected to realize an operating revenue of 13.845 billion yuan to 15.302 billion yuan, an increase of 43.55% – 58.67% at the same time. The net profit attributable to the parent company was 4.040-4.466 billion yuan, an increase of 121.35% – 144.65% at the same time; It is estimated that the net profit attributable to the parent company will be 382-808 million yuan in single Q4, 610 million yuan in 20q4 and 1.47 billion yuan in 21q3.
Comments:
21q4 glass price decline superimposed on rising costs, and the single quarter performance fell month on month, but did not deviate significantly from expectations. In the first three quarters, the price of float glass continued to rise, and the increase was greater than that of soda ash and other raw materials. In the fourth quarter, affected by the capital problem of the real estate chain, the real demand for glass and market sentiment cooled to a certain extent, and the price also fell from the high point of the cycle. As of December 31, 2021, the price of glass has dropped to 2087 yuan / ton, a decrease of 30% compared with the end of September.
On the cost side, the price of heavy soda ash continues to rise. In 2021q4, the national average price of heavy soda ash is 3391 yuan / ton, an increase of 72% and 98% year-on-year compared with the average price in the first three quarters of 21 years. In addition, the prices of natural gas and other fuels are also rising in the heating season, and the overall cost of glass increases significantly.
The uncertainty of the market in the spring of 22 is enhanced, which is expected to drive the bottom of the glass sector to start.
At present, the glass price has gradually stabilized and the cost pressure continues to ease. As of January 26, 2022, the price of float glass is 2009 yuan / ton, which has reached the breakeven line of some enterprises; The price of heavy soda ash decreased from 3800 yuan / ton at the end of October 2021 to 2379 yuan / ton.
Steady growth is expected to gradually heat up. Under the background of loose credit environment and guaranteed completion, the subsequent glass demand is expected to pick up. End customers usually have limited stock in the off-season. With the start of demand after the festival, the voice may return to the upstream links again. We believe that thanks to the strong glass market in the past two years, glass manufacturers and middlemen have sufficient financial strength and willingness to promote a new round of release of market sentiment. If the follow-up demand is continuously supported, the annual high price can still be expected.
Although we emphasize that we are not pessimistic about the completion demand in 22 years, at the same time, we recognize that it is an inevitable trend for the medium and long-term completion demand to weaken or even decline step by step. However, for float glass, the impact factor of performance elasticity caused by short-term supply-demand mismatch is more important than valuation factor.
Not only the price elasticity of float glass, but also the quadratic growth curve of enterprises.
We continue to firmly recommend Zhuzhou Kibing Group Co.Ltd(601636) not only because of the catalysis of the expected rise in glass prices, but also pay more attention to the long-term growth attribute of the enterprise. 1. The company’s ultra white float glass is applied to photovoltaic module panels to achieve a major technological breakthrough, and the acceptance of downstream customers is high. If it is popularized on a large scale, the float assets will be revalued. 2. The company will successively put into operation several photovoltaic calendered glass production lines in 22 years. If the single line operation quality proves that it can be the leader in the standard industry, it is expected to gradually rank among the first echelon of the industry in the future. 3. The company continues to expand its business in energy conservation, electronics, medical glass and other aspects. The above fields are growth tracks.
Profit forecast, valuation and rating: the price of float glass is expected to rise. At the same time, the company has made positive progress in the application of photovoltaic float products, and the traditional photovoltaic calendering production line will be gradually put into operation in 2022. In addition, we are optimistic about the expansion of the company’s business in energy conservation, electronics, medical glass and other aspects, and have high growth potential in the future. Due to the decline of the high glass price in the fourth quarter of 21, which also affected the central expectation of glass price in 22-23 to a certain extent, we lowered the company’s EPS in 21-23 to 1.58, 1.59 and 1.61 yuan respectively (15.96%, 11.67% and 8.00% lower than the last time). We are still optimistic about the company’s performance elasticity and long-term growth, and maintain the “buy” rating.
Risk tip: the price rise of float glass is less than expected, the progress of photovoltaic module panel applied to float glass is less than expected, and the expansion of investment and construction projects is less than expected.
