\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 for 2021, and the company achieved a total operating revenue of 19.7 billion yuan in 2021, a year-on-year increase of + 69%; The net profit attributable to the parent company was 6.03 billion yuan, a year-on-year increase of + 150%; The non net profit deducted was RMB 5.15 billion, a year-on-year increase of + 165%.
Comments:
The quantity and price of 21q4 roving have risen simultaneously, and the high bearing may be maintained for 22 years. The company achieved 2.35 million tons of glass fiber roving and products sales in 21 years, a year-on-year increase of + 13%. It is estimated that the sales volume of 21q4 roving of the company is about 660000 tons, with double-digit growth over the same period. It is mainly benefited from the production of intelligent manufacturing line 4 of Tongxiang base in September 21, contributing to the new production capacity of the company. It is estimated that the average price per ton of roving in 21q4 of the company has increased steadily month on month, or mainly benefited from the price increase of some roving products in 21q4 of the company.
Since the beginning of 22 years, the glass fiber roving industry has maintained a high outlook, the roving price has remained stable on the whole, the prices of individual varieties have increased slightly, and the supply and demand pattern is still tight. From January to February 2022, the demand for roving at home and abroad showed an upward trend, especially the strong demand in overseas markets such as Europe and the United States, and the company’s mainstream roving products were in short supply. In terms of downstream demand, China’s downstream demand for new energy vehicles, wind power and infrastructure has maintained growth; In terms of overseas markets, it has continued its high outlook for 21 years since the beginning of the year 22. In 2021, the total export volume of China’s glass fiber and products was 1.713 million tons (year-on-year + 25.2%), a record high, which has exceeded the pre epidemic level; In December 21, China’s export volume of glass fiber and products was 169000 tons, a year-on-year increase of + 52%. The rapid growth of export volume in 21 years has provided important support for the tight supply and demand pattern of China’s glass fiber market, and then supported the resilience of glass fiber roving price. It is judged that the export volume has maintained a high growth rate since the beginning of 22 years, which continues to form a strong support for China’s supply and demand pattern. In the future, we need to continue to pay attention to the changes in the year-on-year growth rate of export volume, which may become an important variable affecting China’s glass fiber price.
21q4 electronic cloth prices fall, and the net profit of electronic cloth in 22 years may be under pressure. The company achieved 440 million meters of sales of electronic cloth products in 21 years, a record high, mainly benefiting from the continuous production of new production capacity. It is estimated that the company’s electronic cloth business has contributed about 1.7 billion yuan of net profit to the company in 21 years, becoming a new profit growth point of the company. Under the impact of new supply, the prices of electronic yarn and electronic cloth have peaked and fallen recently. Taking the price of Taishan glass fiber G75 electronic yarn as an example, the price has fallen from the high point of 17000 yuan / ton in 21q3 to the current 10000 yuan / ton. It is judged that the price of the company’s electronic cloth has fallen from the high point of 8-9 yuan / m to about 4 yuan / m. According to the data of Zhuo Chuang information, we estimate that the new output of China’s electronic yarn in 22 years is expected to be 185000 tons. It is judged that the new supply in the field of electronic yarn will significantly exceed the new demand in 22 years, thus forming a market pattern of oversupply. The prices of electronic yarn and electronic cloth may fall further, and the profits of the company’s electronic cloth business may be under great pressure in 22 years.
The company’s capacity scale will continue to expand to help the company maintain its competitive advantage. The company will build Tongxiang electronic line 3 in 22 years, add an annual output of 100000 tons of electronic yarn capacity, and is expected to ignite in the middle of 22 years. According to the announcement of the company on February 8, 22, the company will start the construction of Chengdu base in the first half of 22, with an annual output of 150000 tons of glass fiber chopped precursor production line, and the construction period of the project is one year. According to the announcement of the company on March 18, 2002, the company will invest in the construction of an intelligent manufacturing base in Jiujiang base, with an annual output of 400000 tons of glass fiber production line. The first line of the project (with an annual output of 200000 tons) is planned to be started in 22 years and put into operation in 23 years; Line 2 of the project (with an annual output of 200000 tons) is planned to be started in 23 years and put into operation in 24 years.
According to the 14th five year plan of the company, it is expected that the company will build a total production capacity of nearly 1.7 billion meters of electronic cloth during the 14th Five Year Plan period, and the roving production capacity is expected to increase to about 3.5-4 million tons. The continuous growth of production capacity will help the company to continuously improve the market share, maintain the leading edge in the industry, and provide a new source for the continuous growth of the company’s revenue and net profit.
The company will build its own gas station to ensure the production stability of the company. The company announced (issued on March 18, 2022) that it will invest in the construction of gas station and supporting pipeline project in Tongxiang production base to meet the gas use demand of the existing base and the new production base in the future during the 14th Five Year Plan period, and improve the stability and continuity of the operation of the production base. The project includes dual gas sources of liquefied natural gas (LNG) and pipeline natural gas. The total investment of the project is 350 million yuan. According to the functional orientation of the project and the current situation of gas supply, the external supply scale of LNG gasification of the proposed gas station is 60000 standard m3 / h, the access scale of gate station is 60000 standard m3 / h, and the transmission scale of medium pressure export pipeline is 40000 standard m3 / h; The LNG storage capacity is 20000 standard cubic meters, which can be used for 8.5 days under the maximum gasification capacity of 60000 standard cubic meters / hour. The construction period of the project is one year, and it is planned to start in the first half of 2022.
The investment and construction plan will benefit the company from economy and production stability. On the one hand, energy prices have continued to rise in the past 21 years, and the company is also facing the cost side pressure of natural gas price rise. This plan will save the company’s gas use cost and bring economic benefits to a certain extent; On the other hand, the sufficient and stable gas supply in the process of glass fiber production is very important to the production results. The company’s self built gas station will provide guarantee for the continuity and stability of production in Tongxiang base. This measure will further strengthen the company’s competitive advantage as a leading company.
Profit forecast, valuation and rating: we are optimistic about the company’s cost advantage in the roving field and the logic of increasing the proportion of the company’s high-end products in the future. At the same time, we are concerned about the development of the company’s electronic cloth business. It is expected to replicate the cost advantage in the roving field in this field and create a new source for the company’s long-term profit growth. Based on the judgment of the price trend of glass fiber roving and electronic cloth, we adjusted the company’s EPS forecast from 2022 to 2023 to 1.59 yuan (up 3%) and 1.43 yuan (down 8%) respectively, and increased the EPS forecast of 2024 to 1.46 yuan. The current price corresponds to the dynamic P / E ratio of about 10x in 2022. Considering that the roving landscape has remained high in 22 years, it is judged that the profitability of the company will maintain positive growth and maintain the “buy” rating.
Risk warning: the demand for glass fiber is less than the expected risk; Risk of falling price of glass fiber products; Risk of rising raw fuel prices; Risk of exchange loss caused by exchange rate fluctuation; Risks of overseas subsidiaries affected by local policies, etc.
