\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 176 China Jushi Co.Ltd(600176) )
The company released the first quarterly report of 2022: in 2022q1, the company achieved a revenue of RMB 5.133 billion, a year-on-year increase of + 28.44%, a net profit attributable to the parent of RMB 1.836 billion, a year-on-year increase of + 72.68%, and a deduction of non net profit of RMB 1.442 billion, a year-on-year increase of + 36.14%. The gross profit margin and net profit margin of sales were 44.57% and 36.81% respectively, with a year-on-year increase of + 1.1 and + 10.1pct. The non recurring profit and loss of 394 million is expected to be mainly the profit from the sale of rhodium powder. The average settlement price of 99.95% rhodium powder imported by Shanghai Huatong in 2022q1 is 4261 yuan / g, and that from 2018q1 to 2021q1 is 448, 715, 2644 and 5576 yuan / g respectively.
The volume and price of glass fiber increased year-on-year, and the unit net profit continued to be high: ① the roving price was stable and increased year-on-year. The average price of 2400tex national winding direct yarn in Q1 was 6138 yuan / ton, year-on-year + 333 yuan / ton, and month-on-month – 40 yuan / ton, which was basically stable. The cost of natural gas has increased greatly. In Q1, the price of natural gas in Zhejiang is 3.99 yuan / m3, with a year-on-year increase of + 0.88 yuan / m3. Assuming that the unit consumption of natural gas is 140 m3 / ton, the unit natural gas cost is estimated to be + 123.2 yuan (only calculated). Considering the impact of the price rise of pyrophyllite (less than that of natural gas) and power, we expect the profit per ton of Q1 glass fiber to still increase year-on-year.
② the sales volume of roving and products reached 530000 tons, which was basically the same year-on-year, mainly because some customers in Q4 China were worried about the price increase and prepared goods in advance, as well as the logistics affected by the epidemic in March. In addition, the year-on-year increment of production capacity is focused on Tongxiang intelligent line 3 with an annual output of 150000 tons, which was put into operation in May 21, and Tongxiang intelligent line 4 with an annual output of 150000 tons, which was put into operation in August 21.
The price of electronic cloth is under pressure, the industry may have suffered losses, and the expected price is stable: the average price of 7628 electronic cloth in Q1 industry is about 4.52 yuan / meter, a year-on-year increase of -1.79 yuan (- 28.4%). The Q1 sales volume of the company was 115 million meters, with a year-on-year increase of + 15%. The main increment came from Tongxiang 300 million square meters of electronic cloth put into operation in March 21. The performance was more prominent in March 22, with production and sales exceeding 100%. At present, in addition to Jushi, the industry may suffer losses. On the one hand, it inhibits the power of the industry to put into production. On the other hand, Jushi balances the relationship between supply and demand and continues to reduce costs by shutting down and cold repairing two old lines.
Recognition of the high export boom and the relationship between supply and demand: on the demand side, it is expected that the industry increment mainly comes from the fields of export, new energy vehicles and wind power. The supply of glass fiber in Europe is subject to the rising energy prices. In 2022q1, China’s export of glass fiber and products is 545500 tons, with a year-on-year increase of + 49.7%, and the export amount is 952 million US dollars, with a year-on-year increase of + 49.6% (Zhuo Chuang information). The supply side continues to digest the newly invested capacity in the early stage. Under strict assumptions, the actual new capacity this year is still limited. However, the company has made incremental contributions. For example, Tongxiang 300 million square meters of electronic cloth (Q2) + Chengdu line 3 alkali free roving tank kiln 150000 tons (expected Q3) + Egypt line 4 alkali free roving tank kiln 120000 tons (expected Q4) has been put into operation.
22q1 short-term borrowings decreased: in 2022q1, the total cost rate of the company was 8.93%, with a year-on-year increase of -2.51pct. Among them, the rates of sales, management, R & D and financial expenses were 0.73%, 3.12%, 2.7% and 2.38% respectively, with a year-on-year increase of -0.14, -1.19, -0.41 and -0.78pct respectively. Focus on short-term loans of 3.347 billion, down 590 million and 1.69 billion respectively from the beginning of the year and the same period last year.
Investment suggestion: continue to recommend China Jushi Co.Ltd(600176) , pay attention to: ① weakening of cycle attribute, ② continuous export boom, ③ optimization of Jushi product structure, relay growth of “troika” thermoplastic, wind power and electronic yarn, and ④ strict approval of new construction in the industry. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 6.721 billion yuan, 7.130 billion yuan and 7.854 billion yuan respectively, and the corresponding dynamic PE on April 25 will be 9x, 8x and 7x respectively. The company’s valuation is significantly low and maintains the “recommended” rating.
Risk warning: macroeconomic downturn; The pace of industrial capacity launch is lower than expected; Fuel prices fluctuated sharply.
