\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 176 China Jushi Co.Ltd(600176) )
Key investment points
Under the boom of the industry, the performance is the best in history. In 2021, the company’s revenue / net profit attributable to the parent company / net profit deducted from non net profit were 197.1/60.3/5.15 billion and yoy + 68.9% / 149.5% / 165.2% respectively. The net profit attributable to the parent company is about 880 million higher than the non deduction profit, mainly due to the non recurring profits and losses caused by the sale of some precious metals / the relocation of Chengdu plant, which are about 690 million / 190 million respectively. Revenue / net profit attributable to parent company / deduction of non net profit of RMB 5.87/17.2/1.2 billion in the fourth quarter, yoy + 54.9% / 51.7% / 51.0%. The deduction of non profit in the fourth quarter alone decreased by 230 million month on month compared with the third quarter. We judge that it is mainly because the excess profit accrued in Q4 is higher than Q3 (we estimate that the excess profit accrued in Q3 / Q4 is about 200 / 500 million respectively). After excluding this impact, we estimate that the non deduction profit of Q4 is still higher than that of Q3, and the non deduction profit of “normal operation” in 21 years reaches 5.85 billion.
Roving sales exceeded expectations and the impact of rising costs was limited. In 2021, the company achieved roving sales of 2.35 million tons, yoy + 12.8%, of which Q4 achieved sales of about 676000 tons, 17.6% higher than Q3 and 6% higher than expected. Considering that the company has raised the price of roving products outside China since October 1, 2001, it is estimated that the average price of Q4 roving has increased steadily, and the profit of Q4 ton has remained stable. The sales volume of electronic cloth was 440 million meters, yoy + 16.4%, of which the sales volume of Q4 was about 100 million meters, down about 20 million meters from Q3. Affected by the sharp rise in energy (natural gas, etc.), we estimate that the manufacturing cost of ton roving of the company will increase slightly in 21 years, but the overall impact is limited. Under the high energy cost, the cost side is expected to remain under pressure in 22 years, but with the further development of the company’s low-cost intelligent manufacturing line, the pressure on the cost side is generally controllable.
The expansion of production capacity was accelerated and the product structure was continuously optimized. The company announced that it plans to build a new production capacity of 400000 tons of glass fiber roving in Jiujiang (which has been approved by the government and is expected to be put into operation in 23 / 24 years respectively). In addition, the production capacity of 100000 tons of electronic yarn / 120000 tons of roving in Egypt / 150000 tons of roving in Chengdu is expected to be put into operation at the end of 22q2 / the end of 22 / 23h1 respectively. We estimate that the company’s high-end products (wind power / thermoplastic / electronic yarn, etc.) account for more than 80% in 21 years. With the pull of downstream demand and the company’s active adjustment of capacity structure, it is expected that the product structure is expected to be continuously optimized and the anti cyclical / profitability is expected to be continuously enhanced.
The boom duration of roving may exceed expectations, and the price of electronic cloth has reached the bottom range. Affected by the dual control of energy consumption, it is more difficult for the industry to increase new production capacity, and the landing uncertainty increases, and the growth rate of the supply side of the industry may slow down; Driven by the continuous recovery of overseas demand and the demand in downstream wind power / Automobile / electrical appliances and other fields, the demand side grew steadily; We judge that the tight balance between roving supply and demand is expected to normalize, and the boom duration and intensity may exceed expectations. In addition, with the sharp rise in the prices of other bulk commodities, the cost performance advantage of glass fiber continues to strengthen, which can also support the high price of glass fiber roving. According to Zhuo Chuang information, the price of electronic cloth fell from a high of 8-9 yuan / m to 3.7 yuan / M (data on March 18). We estimate that it is difficult for second-line manufacturers to make profits at present. The price of electronic cloth may enter the bottom range, and there is limited room for further decline.
Investment suggestion: we slightly reduced the net profit attributable to the parent company in 22-24 years to 6.1/64/6.7 billion yuan (the original net profit attributable to the parent company in 22 / 23 years was 6.5/6.8 billion yuan), mainly considering the large decline in the price of electronic cloth, and reduced the assumption of average price of electronic cloth. The adjusted profit forecast corresponds to 10.6 / 10.1 / 9.6 times of the current share price PE. Considering that the industry cycle is expected to weaken, the roving boom continues, the company accelerates the expansion of production capacity, continuously optimizes the product structure, and maintains the “overweight” rating.
Risk warning: the demand is less than expected; The new production capacity of small enterprises exceeded expectations; The price of medium and high-end products fell more than expected
