\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 176 China Jushi Co.Ltd(600176) )
Core view
The glass fiber boom continued and Q1 performance reached a new high. In 2022q1, the company realized an operating revenue of RMB 5.133 billion, a year-on-year increase of + 28.44%, a month on month increase of – 12.57%, and a net profit attributable to the parent company of RMB 1.836 billion, a year-on-year increase of + 72.68%, a month on month increase of + 6.52%, deducting the net profit not attributable to the parent company of RMB 1.442 billion, a year-on-year increase of + 36.14%, a month on month increase of + 19.82%. The non recurring profit and loss was mainly the disposal income of non current assets of RMB 436 million, mainly due to the disposal income from the sale of some precious metals, with EPS of RMB 0.
Profitability has increased steadily, and the expense rate has been continuously optimized. 2022q1 achieved a gross profit margin of 44.57%, with a year-on-year increase of + 1.05pp and a month on month increase of + 1.38pp. The gross profit margin remained high and steadily increased, mainly benefiting from the year-on-year increase of glass fiber price and digesting some cost pressure; During the period, the expense rate was 8.93%, with a year-on-year ratio of -2.51pp and a month-on-month ratio of -8.74pp, of which the sales / management / Finance / R & D expense rate was 0.73% / 3.12% / 2.38% / 2.7% respectively, a year-on-year ratio of -0.14pp / – 1.19pp / – 0.78pp / – 0.41pp and a month-on-month ratio of -0.16pp / – 8.42pp / + 0.07pp / – 0.23pp. The expense rate continued the optimization trend, in which the administrative expense rate fell sharply month-on-month, mainly due to the significant increase of administrative expenses due to the provision of excess profit sharing in 2021q4. Benefiting from the good control of expense rate, the income from superimposed asset disposal increased, and the net interest rate increased significantly, realizing a net interest rate of 36.8%, a year-on-year increase of + 10.07pp and a month on month increase of + 6.51pp.
The upgrading of production capacity was accelerated and the product structure was continuously optimized. The company announced that it would start timely according to the market and the operation of the original production line: 1) the cold repair and transformation of the production line with an annual output of 120000 tons in Tongxiang base, and the production capacity would be increased to 200000 tons after completion; 2) After the cold repair technical transformation of 30000 tons of electronic yarn and 100 million meters of electronic cloth production line is completed, the production capacity will be increased to 50000 tons (supporting 160 million meters of electronic cloth), and the 15000 tons of electronic yarn and 50 million meters of electronic cloth production line will be shut down. With the orderly progress of cold repair technical transformation of the old line, it is expected to further improve quality, efficiency and reduce costs. At the same time, the third phase of Tongxiang intelligent manufacturing base, 100000 tons of electronic yarn and 300 million meters of electronic cloth, is expected to be put into operation in 22q2; Egypt’s phase IV 120000 ton production line is accelerated and is expected to be put into operation by the end of 22; The 150000 ton chopped strand production line of Chengdu intelligent manufacturing base is promoted on schedule and is expected to be put into operation in 23h1; The 400000 ton glass fiber production line of Jiujiang intelligent manufacturing base is implemented in two phases and is expected to be put into operation in 2023 and 2024 respectively. The capacity layout is accelerated and the product structure is continuously optimized, which is expected to further improve the profitability.
Risk tip: the economic recovery is less than expected; Production capacity exceeds expectations; Raw fuel prices rose more than expected.
Investment suggestion: the wind power / Automobile / Electronics relay is growing, and the leading advantage of glass fiber is highlighted. Maintaining the “buy” benefits from the rotation pull of wind power, automobile and electronics. The superimposed export boom is good, and the demand for glass fiber is supported. Combined with the scale and rhythm of supply increase during the year, it is expected that roving is expected to maintain a tight balance, the high price of electronic yarn has fallen to the bottom range, and the downward space is expected to be limited. We are optimistic about the company’s competitive advantage as a glass fiber leader. The accelerated upgrading of production capacity and products helps the growth, and the advantages continue to highlight. It is estimated that the EPS of 22-24 years will be 1.52/1.62/1.78 yuan / share respectively, and the corresponding PE will be 9.4/8.8/8.0x, maintaining the “buy” rating.
