\u3000\u3000 China Jushi Co.Ltd(600176) (600176)
Q4 operated steadily and its performance slightly exceeded expectations. The company announced the performance forecast for 2021. During the reporting period, the net profit attributable to the parent company was 5.80-7.01 billion, yoy + 140% - 190%, with a median value of 6.4 billion, slightly exceeding expectations; The net profit deducted from non parent company was 4.85-5.83 billion, yoy + 150% - 200%, with a median value of 5.34 billion, which was basically in line with expectations. Among them, the median net profit attributable to the parent company in the fourth quarter was 2.1 billion, deducting the median non net profit of 1.39 billion (basically the same as Q3). Q4 has a lot of non recurring profits and losses. We judge that first, the government subsidies (including the demolition compensation of Chengdu base is expected to be about 190 million) are distributed intensively, and second, the company continues to sell some precious metals. In addition, according to the excess profit sharing plan announced by the company on August 17, we expect that Q4 company may have accrued a large amount of excess profit sharing. If this factor is excluded, we expect Q4 deduction of non-profit to continue to increase month on month compared with Q3.
The average price of roving rose steadily and the price of electronic cloth fell normally. It is estimated that the roving sales volume of 21q4 company is about 570000 tons, which is basically the same month on month, with a year-on-year decline of about 10%, mainly due to the high base affected by de inventory in the same period last year. The company has raised the price of roving products outside China since October 1. It is expected that the price increase will be well implemented, and the average price of Q4 roving is expected to rise steadily. Considering the rising price of Q4 natural gas, we judge that the cost per ton of roving has increased, but the overall impact is limited. It is expected that the profit per ton of Q4 roving will increase slightly month on month. Affected by the weakening demand for downstream PCB, it is estimated that the sales volume of 21q4 electronic cloth is about 100 million meters, and the inventory has increased. According to Zhuo Chuang information, it is estimated that the mainstream average price of Q4 electronic cloth is about 7-8 yuan / m. considering some long-term association orders of the company's electronic cloth, it is expected that the average price of Q4 is slightly lower than the mainstream price. According to Zhuo Chuang information, as of January 10, the mainstream price of electronic cloth fell back to 5.5 yuan / m, which we believe is a normal decline under the high price. Considering the pull of 5g / smart car / smart home / smart factory on PCB, we expect that the company's electronic cloth is expected to maintain a good growth in 22 years, and the price / profit is expected to remain at a good level.
The industry cycle is expected to weaken and the company's production capacity will expand steadily. We expect that the industry's new production capacity in 22 years is limited, with roving / electronic yarn of about 42 / 100000 tons respectively. With the overall improvement of the demand side, we expect that the roving boom in 22 years is expected to continue, and the electronic yarn price center will fall, but it is still expected to maintain a good level. In the medium and long term, under the "dual control of energy consumption", it is more difficult to increase the industry's new capacity, the landing uncertainty increases, and the growth of the industry's supply side may slow down; Driven by wind power, automobile, electronics and other fields, the demand side grew steadily; We judge that the tight balance between supply and demand in the industry is expected to be normalized. The company's production capacity construction has been steadily promoted. It is expected that the 100000 ton electronic yarn / 120000 ton roving production line in Egypt is expected to be put into operation at the end of 22q2 / 22 respectively, and the market share of the company is expected to be further improved. The company continues to increase the proportion of high-end products (wind power / thermoplastic / electronic yarn, etc.) to drive the continuous optimization of product structure.
Investment suggestion: we raised the net profit attributable to the parent company from 21 to 23 years to RMB 64 / 65 / 68 billion (the original net profit attributable to the parent company was RMB 58 / 63 / 68 billion), mainly considering the company's sale of precious metals and raising the investment income assumption. After the increase, the profit forecast corresponds to the current share price PE of 11.5 / 11.3 / 10.8 times. The company has steadily expanded its production capacity, optimized its product structure and maintained 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.
