\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 176 China Jushi Co.Ltd(600176) )
The company released its annual report for 2021 on March 18, with a revenue of 19.71 billion yuan during the reporting period, an increase of 68.9% at the same time; The net profit attributable to the parent company was 6.03 billion yuan, an increase of 149.5% at the same time; EPS1. 51 yuan / share. In 2021, the glass fiber industry was highly prosperous, the sales volume of the company’s glass fiber and products reached a new high, and the revenue and net profit increased rapidly.
Key points supporting rating
The industry is highly prosperous, and the revenue is growing rapidly: in 2021, the glass fiber industry is highly prosperous all year round, benefiting from the rapid development of glass fiber downstream new energy vehicle industry, strong demand of PCB industry and the growth of export orders. In 2021, the company achieved sales of 2.353 million tons of roving and products and 440 million meters of electronic cloth, a record high. The company’s 2021q4 revenue was 5.87 billion yuan, with a month on month / year increase of 11.3% / 54.9%, and the net profit attributable to the parent company was 1.72 billion yuan, with a month on month / year increase of 0.9% / 51.6%.
The production capacity continues to expand with significant scale advantages: during the reporting period, the second line of electronic yarn intelligence and the third and fourth line of roving intelligence in Tongxiang base of the company were ignited, and the newly put into production capacity totaled 360000 tons. In 2022, Jushi Chengdu production line with an annual output of 150000 tons of chopped yarn and Tongxiang intelligent production line with an annual output of 100000 tons of electronic yarn are expected to be ignited and put into operation. In addition, the company announced that the project of glass fiber Jiujiang intelligent base with an annual output of 400000 tons will be put into operation in 23-24 years. The company has the largest production capacity in the world. The expansion of production capacity helps to dilute various fixed costs, further realize economies of scale, and enhance the influence of the company in the industry.
Abundant research and development achievements and optimized product structure: during the reporting period, the company achieved mass production of E9 ultra-high modulus glass fiber and stable production of E7 and E8 electronic yarn. The company’s high-strength and high modulus glass fiber, thermoplastic yarn, electronic cloth and other high-end products account for more than 80%, and the product structure is continuously optimized to quickly respond to the market demand.
The demand is expected to be strong and the industry is stable and positive: in 2021, there will be more new production capacity in the industry, and the production capacity at the end of the year will rise to 6.1 million tons. In the first half of 2022, about 400000 tons of production lines will be ignited and put into operation. In the context of double carbon, the market demand for wind power generation, new energy vehicles and green energy-saving buildings will continue to be strong. We expect that roving will continue to boom and spinning will be oversupplied in the short term.
Valuation
The company’s performance is in line with market expectations, and we slightly adjusted our profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 20.51 billion yuan, 21.85 billion yuan and 23.14 billion yuan; The net profit attributable to the parent company was 6.64 billion yuan, 7.25 billion yuan and 7.76 billion yuan respectively; EPS is 1.66, 1.81 and 1.94 yuan respectively. Maintain the company’s buy rating.
Main risks of rating
The production capacity of glass fiber exceeded the expectation, the cost of raw materials increased, and the demand for glass fiber decreased
