\u3000\u30 Zhongyan Technology Co.Ltd(003001) 96 Jiangsu Changhai Composite Materials Co.Ltd(300196) )
The company’s net profit attributable to the parent company in 21 years increased by 111.5% year-on-year
The company released its annual report for 21 years. In the 21 years, the company realized revenue / net profit attributable to parent company of RMB 2.51/570 billion, with a year-on-year increase of 22.7% / 111.5%, which was in the middle of the performance forecast, and realized deduction of net profit attributable to non parent company of RMB 490 million, with a year-on-year increase of 93.3%. The non recurring income was mainly the profit and loss on disposal of non current assets of RMB 74.81 million, of which Q4 realized revenue / net profit attributable to parent company of RMB 670150 million, with a year-on-year increase of + 19.1% / 103.5%, and deduction of net profit attributable to non parent company of RMB 130 million, Year on year + 84.6%.
In the past 21 years, the volume and price of glass fiber and its products increased simultaneously, and the gross profit margin increased by 9.7pct
The company’s revenue of glass fiber and products in 21 years was 1.724 billion yuan, with a year-on-year increase of 29%. The annual sales of glass fiber and products was 204000 tons, with a year-on-year increase of 4%. We calculated that the average price per ton was 8446 yuan, with a year-on-year increase of 24%, realizing the simultaneous rise of volume and price; The cost per ton was 4996 yuan, up 7% year-on-year. The gross profit margin of glass fiber and products in 21 years was 40.9%, with a year-on-year increase of 9.7pct. On the demand side, under the carbon emission reduction policy, the new energy industry is facing great development opportunities. The installed capacity of wind power and the demand for new energy vehicles are expected to maintain rapid growth, driving the demand for glass fiber yarn. In addition, the overseas export demand continues to improve, and the price of glass fiber and products is expected to remain high. In 21 years, the 100000 ton roving production line of the company was successfully put into operation, the overall capacity scale and market share were further improved, and the sales volume is expected to continue to grow in 22 years.
The revenue of chemical business increased by 12% year-on-year, and the profitability declined
The company’s 21-year chemical business revenue was 680 million yuan, a year-on-year increase of 12%, the annual sales volume was 80000 tons, a year-on-year decrease of 11%, and the price of a single ton was 8518 yuan, a year-on-year increase of 25%. Under the background of the rise in the price of chemical raw materials, the company adjusted the product price synchronously, but the overall gross profit margin still fell by 5.8pct year-on-year, reaching 17.1%. Tianma Group, a wholly-owned subsidiary of the company, has completed the “technical transformation and expansion project of unsaturated polyester resin with an annual output of 100000 tons”, which will be officially put into production and operation after passing the relevant acceptance and trial operation, which is expected to further improve the chemical business income.
The expense rate decreased and the net interest rate increased significantly year-on-year
Driven by the glass fiber business, the company’s overall gross profit margin in 21 years increased by 5.3pct to 33.7%, of which the gross profit margin in Q4 was 34.2% in a single quarter, with a steady increase compared with Q3. During the 21-year period, the expense rate was 10.6%, with a year-on-year decrease of 2.6pct, of which the sales / management / financial expense rate was – 1.5 / – 0.5 / – 0.6pct respectively. The decrease in the sales expense rate was mainly due to the company’s presentation of packaging and service fees in operating costs, and the decrease in the financial expense rate was due to the decrease in exchange losses. The net interest rate is 22.8%, up 9.6pct year-on-year, and is expected to remain high for 22 years.
Growth is expected to begin to cash in and maintain the “buy” rating
We judge that the high prosperity of the glass fiber industry in the past 22 years is expected to continue, and the price center may remain high. The new production capacity of raised investment projects will continue to digest and support income growth. In the medium and long term, the company will continue to promote the construction of various projects (including the production capacity of Shanghai Pudong Development Bank Co.Ltd(600000) tons of glass fiber yarn project and felt and other products), and the growth is expected to begin to realize. Maintain the 22-23 year profit forecast of RMB 700 / 840 million and supplement the 24-year profit forecast of RMB 980 million. With reference to the valuation of comparable companies, give the company 12 times the target PE in 22 years, corresponding to the target price of RMB 20.52, and maintain the “buy” rating.
Risk tip: the company’s production progress is less than expected, the demand for glass fiber is declining, and the industry’s production capacity is greatly expanded.
