\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 176 China Jushi Co.Ltd(600176) )
The company released the first quarterly report of 2022 on April 25, with Q1 revenue of 5.13 billion yuan, a year-on-year increase of 28.4% and a month on month decrease of 12.6%; The net profit attributable to the parent company was 1.84 billion yuan, a year-on-year increase of 72.7% and a month on month increase of 6.5%.
Key points supporting rating
The company’s revenue and profit increased year-on-year, and the profit level remained high: the company’s 22q1 revenue was 5.13 billion yuan, a year-on-year increase of 28.4% and a month on month decrease of 12.6%; Net profit deducted from non parent company was 1.44 billion yuan, with a year-on-year increase of 36.1% and a month on month increase of 19.8%. During the reporting period, the company’s expense rate decreased year-on-year and month on month; The gross profit margin and net profit margin were 44.6% and 36.8% respectively, and the profitability remained high.
The sales volume of glass fiber has made steady progress year-on-year, and the high price of roving is stable: 2022q1 company sells 520000 tons of glass fiber roving and products, which is basically the same year-on-year; Sales of 115 million meters of electronic cloth, a year-on-year increase of about 15%. According to Zhuo Chuang information data, the average price of 2400tex winding direct yarn, the mainstream product of 22q1 glass fiber, was 6179 yuan / ton, up 6.4% year-on-year and slightly down 0.62% month on month.
Continuous expansion of glass fiber production capacity and overweight of upstream calcium raw materials: the company announced that it plans to invest 680 million yuan in the cold repair and transformation of the 120000 ton glass fiber production line in Tongxiang base, and the production capacity will be increased to 200000 tons after completion. In addition, in order to meet the demand for calcium raw materials for glass fiber production in Jiujiang glass fiber intelligent manufacturing base, the company plans to invest 112 million yuan to build an intelligent deep processing project with an annual output of 200000 tons of glass fiber grade calcium oxide and 75000 tons of calcium carbonate environmental protection new materials. After the completion of the project, the company can further expand its scale and cost advantages.
The demand for glass fiber is still strong, but the supply continues to increase and the price may be under pressure: on the demand side, the high prosperity of glass fiber export is expected to continue, and the market demand for wind power, new energy vehicles and green energy-saving building materials in China will continue to be strong during the year. On the supply side, according to Zhuo Chuang information, the total new ignition capacity of the industry in 2021 was about 1.05 million tons, about 400000 tons of production lines were ignited and put into operation in the first half of 2022, and the new capacity gradually reached production in the second half of 21. The continuous increase of supply will bring great downward pressure on prices. We expect roving prices to remain stable, while electronic yarn prices are stable and weak.
Valuation
The company’s performance is in line with our expectations, and we maintain the original profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 20.51 billion yuan, 21.85 billion yuan and 23.14 billion yuan; The net profit attributable to the parent company was 6.64 billion yuan, 7.25 billion yuan and 7.76 billion yuan respectively; EPS is 1.66, 1.81 and 1.94 yuan respectively. Maintain the company’s buy rating.
Main risks of rating
The production capacity of glass fiber is put into operation beyond expectations, the cost of raw materials is rising, the epidemic situation in China is repeated, and the demand for glass fiber is declining
