\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 176 China Jushi Co.Ltd(600176) )
Event:
China Jushi Co.Ltd(600176) released the annual report of 2021: the company achieved an annual operating revenue of 19.707 billion yuan, a year-on-year increase of 68.92%; The net profit attributable to shareholders of listed companies was 6.028 billion yuan, a year-on-year increase of 149.51%.
Key investment points:
The performance has reached a new high and the cost advantage is obvious. In 2021, the company achieved a revenue of 19.707 billion yuan and a net profit attributable to shareholders of listed companies of 6.028 billion yuan, with a year-on-year increase of 68.92% and 149.51% respectively. In 2021, the demand of glass fiber market is strong, and the inventory of glass fiber enterprises in the whole year is at a historically low level. Under the background of dual control of energy consumption, the overall cost of the industry is under pressure. The company’s production lines reduce energy consumption, improve efficiency and continue to maintain cost advantages. The three expense rates of the company continue to decline. In 2021, the gross profit margin and net profit margin are 45.31% and 31.15%, all of which are at a historically high level.
The industry continues its high prosperity and its growth attribute is enhanced. Globally, the main application fields of glass fiber are concentrated in building materials, electronics and electricity, transportation, pipe and tank, industrial application and new energy and environmental protection, accounting for about 34%, 21%, 16%, 12%, 10% and 7%. Among them, there are relatively periodic application fields (building materials, pipes and cans, etc.) and relatively emerging application fields (automobile lightweight, 5g, wind power). Therefore, the glass fiber industry has the dual attributes of “cycle” and “growth”. With the development and progress of the industry, its “growth” attribute continues to strengthen.
The globalization strategy continued to advance and the production capacity layout continued to be optimized. The company’s glass fiber production capacity ranks first in the world, with obvious scale advantages and leading scale. The industry position established by the company is conducive to improving customer stickiness and making the company occupy a more favorable leading position in product supply capacity and pricing power. With the acceleration of the process of global economic integration, the company adheres to the concept of “building markets before factories” and steadily implements the strategy of “three places and five continents”. There are three production bases in Tongxiang, Jiujiang and Chengdu in China, and foreign production layout in South Carolina, the United States and Suez, Egypt, so as to realize “external supply”, improve the global market share and highlight the company’s unique strategic vision.
Profit forecast and investment rating. The high prosperity of the company’s glass fiber industry continues, the downstream demand for automobile lightweight, 5g and wind power is strong, the growth attribute of the glass fiber industry is enhanced, the scale of the company’s glass fiber production capacity ranks first in the world, and the scale advantage is obvious. We predict that the net profit attributable to the parent company from 2022 to 2024 will be 6.903 billion yuan, 7.820 billion yuan and 8.724 billion yuan respectively, corresponding to EPS of 1.72 yuan, 1.95 yuan and 2.18 yuan respectively, and corresponding PE of 9.38x, 8.28x and 7.42x respectively, maintaining the “buy” rating.
Risk warning. The market demand of glass fiber is less than expected; The price change of glass fiber is less than expected; Natural gas prices rose sharply; Exchange rate changes exceed expectations; The epidemic has repeatedly affected the economy; Adverse changes have taken place in the macro environment.
