\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 176 China Jushi Co.Ltd(600176) )
Event overview
The company released the first quarterly report of 2022. In 2022q1, the company's total operating revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company were 51.3 / 18.4 / 1.44 billion yuan respectively, with a year-on-year increase of + 28% / 73% / 36% respectively. On the same day, the company announced the cold repair and technical transformation of 1) 120000 ton production line in Tongxiang base and 2) 30000 ton electronic yarn (100 million meters of electronic cloth) production line. After the technical transformation, the production capacity was expanded to 200000 tons / 50000 tons (160 million meters) respectively.
Slightly higher than expected, roving prices remained high. Q1 performance of the company slightly exceeded expectations. According to Zhuo Chuang's data, the price of 2400tex winding direct yarn of mainstream manufacturers in 2022q1 remained at a high level of about 6250 yuan / ton, and the manufacturer's inventory remained at a medium low level. Among them, the performance of subdivided downstream such as thermoplastic and wind power yarn was relatively strong. From a subregional perspective, the export performance of the company was better in 2022q1 due to the relaxation of overseas epidemic control and the recovery of demand. However, in China, the roving sales volume of the company was affected by 1) the acceleration of delivery by some enterprises in 2021q4 under the expectation of price rise, 2) the impact of epidemic control in some key cities in 2022q1 on the demand. We estimate that the roving sales volume of 2022q1 company was flat and slightly decreased year-on-year.
The sales volume of electronic yarn increased and the price was under pressure. Due to the ramp up of production capacity, the sales volume of electronic yarn of 2022q1 company has increased year-on-year. However, due to the deterioration of supply and demand pattern, the industry price is under pressure. According to Zhuo Chuang data, the price of G75 electronic yarn has decreased from 14000 yuan / ton at the beginning of the year to about 8750 yuan / ton. It is judged that the price of electronic yarn of 2022q1 company has also decreased. In addition, due to the rise of natural gas and other costs, the unit cost of the company's glass fiber business in 2022q1 also increased. However, due to the high price of precious metals such as rhodium powder in 2022q1, the benefits of the company's asset disposal increased year-on-year (the company had a certain rhodium powder reserve in the early stage, and the unit consumption was reduced under the technological upgrading, so some idle rhodium powder was sold), which thickened the company's performance.
The logic of volume increase is clear, and the scale effect may be further reflected. From 2021 to 2022, the company successively announced plans for 400000 ton roving production line in Jiujiang, Jiangxi, 120000 ton roving production line in Egypt and 150000 ton production line in Chengdu. The above production lines are expected to be put into operation successively from 2023 to 2024. Superimposed on the cold repair technical transformation and expansion plan announced this time, it is estimated that the roving capacity of the company will increase by more than 30% compared with the current one, and the electronic yarn capacity will also enter the first echelon of the industry. With the expansion of single line capacity, The company's future scale effect is also expected to be further reflected, and the cost is expected to continue to be in the downward channel. In addition, the company's cold repair is also expected to reduce market supply, further balance market supply and demand and stabilize product prices.
Investment advice
Keep the profit forecast unchanged. It is estimated that from 2022 to 2024, the company's revenue will be RMB 22.59/248.3/26.15 billion, eps1.5 billion 53 / 1.75/1.87 yuan, corresponding to the closing price of 14.3 yuan on April 25, 9.36/8.19/7.65x PE. Maintain the target price of 21.00 yuan and the "buy" rating.
The demand for risk warning is lower than expected, the cost is higher than expected, and there are systemic risks.
