\u3000\u3000 Zhejiang Juhua Co.Ltd(600160) (600160)
On the evening of January 24, Zhejiang Juhua Co.Ltd(600160) released the performance forecast for 2021. In 2021, the company is expected to realize the net profit attributable to the shareholders of the listed company of 1.01-1.19 billion yuan, an increase of 959% – 1148% year-on-year; The net profit attributable to the shareholders of the listed company after deducting non profits was 922-1102 million yuan, with a year-on-year increase of 1.035-1.215 billion yuan.
Key investment points:
The price of main products generally rose, and the performance in the fourth quarter exceeded the expected growth: Quarterly, the company is expected to realize a net profit attributable to the parent company of 752-932 million yuan in the fourth quarter, with a month on month increase of 388.31% – 505.19% and a year-on-year increase of 1219.30% – 1535.09%. In the second half of 2021, the prices of the company’s main products generally increased significantly under the influence of favorable downstream demand, rising raw material prices and the tightening of market supply caused by the “double control” power and production restriction of periodic energy consumption, among which fluorochemical raw materials, refrigerants and fluoropolymer materials increased the most. The annual average price of fluorine chemical raw materials increased by 80.91% year-on-year, 100.03% year-on-year and 21.15% month on month in the fourth quarter; The annual average price of refrigerant increased by 41.58% year-on-year, 77.08% year-on-year and 18.92% month on month in the fourth quarter; The average annual price of fluoropolymer materials increased by 48.04% year-on-year, 76.78% year-on-year and 27.51% month on month in the fourth quarter. Based on the fact that the company is fully self-sufficient in terms of raw materials methane chloride and can partially meet the production demand in terms of anhydrous hydrogen fluoride, the cost advantage brought by the company’s high integration is more prominent in the current round of price rise of main products and raw materials, which promotes the company’s performance in the fourth quarter and even the whole year to achieve more than expected growth.
Actively grasp the industry outlet and expand PVDF: up to now, under the background of strong downstream demand, continuous imbalance between supply and demand of battery grade products and high price support of R142b at the raw material end, the price of PVDF remains high. According to the data of Baichuan Yingfu, as of January 25, the mainstream prices of granular materials, powder materials and battery grade PVDF were 320000 yuan / ton, 340000 yuan / ton and 445000 yuan / ton respectively, an increase of 300%, 300% and 286.96% respectively compared with the same period in 2021. The company has been engaged in the PVDF industry for many years. The PVDF production capacity was 3500 tons / year in 2021, including 1000 tons of battery level production capacity, and another 6500 tons of production capacity will be put into operation in the first half of 2022. The company has a complete layout of the “vdc-r142b-vdf-pvdf” industrial chain. Its production cost is not affected by the price fluctuation of raw materials, and the profit space has expanded significantly in the process of PVDF price rise. Now, based on its own technical advantages and industrial chain advantages in the field of PVDF, the company plans to add 48kt / avdf technical transformation and expansion project and 30kt / avdf technical transformation and expansion project (phase I) and 23.5kt/avvdf project. Among them, the newly added 48kt / avdf technical transformation and expansion project will support R142b with an additional capacity of 80000 tons / year and 10kt / av143a; The capacity structure of the newly added 23.5kt/a PVDF project is suspension pvdf17 5kt/a, emulsion method PVDF6kt/a, the first phase production capacity is expected to be put into operation in the 4 quarter of 2023. Although it has entered the peak period of PVDF production at that time, and the prices of PVDF and its raw materials may gradually return to rationality, based on the company’s complete industrial chain layout, the technical experience accumulated in many years of PVDF business and the scale effect brought by capacity expansion, the company is still expected to demonstrate the strength and advantages of leading fluorochemical enterprises in a fully competitive market environment.
The IPO of the subsidiary zhongjuxin has been accepted by the Shanghai Stock Exchange to help the development of electronic and chemical business: the listing application of zhongjuxin Technology Co., Ltd. on the science and Innovation Board jointly invested and established by the company and the national integrated circuit industry investment fund has been accepted by the Shanghai Stock Exchange in early January. The electronic gas and wet electronic chemicals mainly operated by zhongjuxin are in the leading position in China. The main wet electronic chemical products have reached the level of 12 inch integrated circuit manufacturing. Some electronic special gas products have achieved mass production and successfully entered the supply chain of famous downstream enterprises such as Semiconductor Manufacturing International Corporation(688981) , Hangzhou Silan Microelectronics Co.Ltd(600460) , China Resources Microelectronics Limited(688396) . The funds raised in this IPO will be used for the technical upgrading and capacity expansion of zhongjuxin electronic wet chemicals. When the new capacity is put into operation, zhongjuxin will strengthen its scale advantage and increase the performance of the company. At the same time, its industry-leading technical strength will also accelerate the localization process of ultra-pure electronic chemicals.
Profit forecast and investment suggestion: in combination with the performance forecast and main operating data disclosed by the company, we have raised the profit forecast of the company. It is expected that the company will realize the net profit attributable to the parent company of RMB 1.052/1642/1956 billion from 2021 to 2023, and the corresponding PE is 29.65/18.99/15.94 (corresponding to the closing price of RMB 11.55 on January 24), maintaining the “buy” rating.
Risk factors: the price of refrigerant and its raw materials fluctuates greatly; Risk that refrigerant demand is less than expected; Risk that the production progress of PVDF under construction is less than expected.
