\u3000\u3000 Jiangsu Changhai Composite Materials Co.Ltd(300196) (300196)
Event Jiangsu Changhai Composite Materials Co.Ltd(300196) released the annual performance forecast for 2021. It is estimated that the net profit attributable to the parent company will be RMB 545-605 million in 2021, with a year-on-year increase of 101% – 124%; The net profit attributable to the parent company after deduction was RMB 465-525 million, with a year-on-year increase of 84% – 107%.
The high growth of net profit is in line with market expectations. It is expected that the net profit attributable to the parent company will reach 124-184 million yuan in a single quarter in the fourth quarter of 2021, with a year-on-year increase of 68% – 149%; The net profit attributable to the parent company after deduction was 102-162 million yuan, with a year-on-year increase of 50% – 138%. In the fourth quarter, the roving price remained high, and the company’s net profit continued to maintain high growth. In addition, the company ignited a 100000 ton glass fiber tank kiln production line in the second half of 2021, and the company’s production capacity increased by 50%. The launch of new production capacity expanded the company’s market scale, further improved the revenue level, and the company’s net profit increased rapidly in the fourth quarter, which was in line with market expectations.
The simultaneous rise of volume and price drives the company’s performance to be better. In 2021, the prosperity of glass fiber industry continues, the downstream market demand is strong, and the inventory of glass fiber enterprises in the whole year is at a historically low level. The Chinese market has benefited from the rapid development of new downstream application fields, such as wind power, automobile lightweight, electronic communication and so on, and the demand for glass fiber has increased significantly. At the same time, due to the resumption of foreign enterprises and the recovery of the market, the overseas market demand of glass fiber has gradually recovered. In 2021, the average monthly export volume of China’s glass fiber and its products increased by 23.17% year-on-year, and the export sales volume increased significantly. High market demand supports the high price of glass fiber. In 2021, the price of glass fiber roving was at an all-time high, Jiangsu Changhai Composite Materials Co.Ltd(300196) winding direct yarn was 2400 Texes, and the average daily ex factory price in 2021 was 5951 yuan / ton, a year-on-year increase of 39.16%. The strong demand in the downstream market and the high price of glass fiber make the company’s sales increase both in volume and price, and the company’s main business maintains a good development trend with good performance.
Establish the glass fiber industry chain and optimize the resource allocation. The company and its subsidiary Tianma Group have carried out vertical and horizontal industrial extension in the glass fiber industry respectively, forming a complete industrial chain layout of “glass fiber yarn glass fiber products resin composites”. Through optimizing the allocation of relevant business resources, the company and its subsidiary Tianma Group realize the complementarity of raw materials and products and reduce the cost of raw materials and related expenses. By further strengthening internal management, the company effectively improves management and operation efficiency and overall profitability.
The high prosperity of glass fiber in the past 22 years has continued, and the company’s performance is expected to further improve. With the rapid development of new application fields in China’s downstream and the rapid recovery of overseas glass fiber market, the total demand for glass fiber is expected to remain strong in 2022, and it is expected that the high demand will support the roving price to maintain a high level. In addition, the company has a production line of 100000 tons of alkali free glass fiber roving, which is planned to be put into operation in 2022. The total production capacity and market scale will be further expanded, and the company’s performance can be expected.
It is suggested that the company’s capacity scale and profitability have developed rapidly in recent years. Under the background of high prosperity of glass fiber industry, the company’s business has great room for development. It is estimated that the net profit attributable to the parent company in 21-23 years will be RMB 577 / 695 / 818 million, the earnings per share in 21-23 years will be RMB 1.41/1.74/2.05, and the corresponding P / E ratio will be 14 / 10 / 9 times. Maintain the “recommended” rating based on the company’s good development expectations.
The risk indicates the risk that the new capacity of the industry exceeds the expectation; The demand of downstream application field is lower than the expected risk; Glass fiber price fluctuation exceeds the expected risk.
