\u3000\u3000 China Jushi Co.Ltd(600176) (600176)
Event overview
China Jushi Co.Ltd(600176) issued the announcement of performance increase in 2021. The company expects that the net profit attributable to the parent company in 2021 will increase by 150% - 200% year-on-year, that is, the non attributable performance of the whole year is RMB 4.85-5.83 billion (median 5.34 billion, year-on-year + 175%), and the net profit attributable to the parent company in 2021q4 is RMB 904 million to RMB 1.884 billion, a year-on-year increase of 31.5% to 137.8% (median 1.394 billion, year-on-year + 75%).
Judging the deduction of non performance is slightly higher than the market expectation. According to the excess profit sharing plan announced by the company, we expect that more excess profit sharing amount will be accrued in Q4 (according to the announcement, the company will start to accrue from 2021q3). At the same time, we expect that there will be more non recurring profits and losses (such as subsidies) near Q4 at the end of the year, superimposed with the rise of natural gas costs in the fourth quarter. We expect that the actual operating performance of 2021q4 is similar to that of 2021q3. In 2021, the company continued the trend of simultaneous increase in volume and price since 2020q4. The duration of this trend was judged to be longer than expected, resulting in the company's performance exceeding market expectations.
The overall volume and price rose in 2021. In 2021, due to the growth of exports and the improvement of domestic demand, the prosperity of the glass fiber industry continued to improve. According to Zhuo Chuang's data, the price of alkali free 2400tex winding direct yarn for representative products increased from about 5600 yuan / ton at the beginning of the year to about 6200 yuan / ton at the end of the year. At the same time, the company's product structure continued to upgrade, and the proportion of high-end products (thermoplastic, electronics, wind power yarn, etc.) increased, We expect that the growth of electronic yarn / cloth will double, and its contribution to performance will be more obvious than that to revenue.
Many downstream areas are expected to make efforts, and the roving price is expected to remain high and the electronic cloth will be reasonably corrected in 2022. We believe that thanks to 1) the increase of wind power installed capacity, 2) the economic recovery brought by steady growth + the continued recovery of overseas offline economic demand + the increase of electric vehicle thermoplastic sales caused by the normalization of chip supply, the roving demand will still maintain the growth trend in 2022. With the easing of the tight supply stage, the electronic cloth is expected to reasonably return to the normal profit margin after the shock.
The logic of volume increase + structure upgrading + cost reduction of the company is still clear, and 2022 is expected to be better than 2021. We expect that the company's production capacity of electronic yarn and supporting electronic cloth will continue to expand in 2022. At the same time, in August 2021, the company announced the construction of a 120000 ton glass fiber production line in Egypt, and China's intelligent manufacturing base is expected to continue to expand. It is judged that the company's production capacity will continue to grow steadily in the future. At the same time, with the further embodiment of scale effect, the company's cost center may still be in a downward channel, The combination of volume increase + upgrading + cost reduction is the source of growth, and 2022 is expected to be better than 2021.
Investment advice
Slightly adjust the price, cost and non recurring profit and loss assumptions in 2021, slightly reduce the revenue forecast from 2021 to 2023 to 199.6/237.3/25.51 billion yuan (Original: 201.85/240.16/25.856 billion yuan), increase the net profit attributable to parent company from 2021 to 2022 to 5.900/6558 billion yuan (Original: 55.64/6482 billion yuan), and reduce the net profit attributable to parent company in 2023 to 7.243 billion yuan (Original: 7.339 billion yuan), Adjust the EPS forecast to 1.47/1.64/1.81 yuan (Original: 1.39/1.62/1.83 yuan), corresponding to the closing price of 18.43 yuan on January 10, and PE is 12.51/11.25/10.19 times respectively. Maintain the target price of 25.02 yuan and the "buy" rating.
Risk tips
Demand is lower than expected, cost is higher than expected, systemic risk.
