\u3000\u3000 Zhejiang Juhua Co.Ltd(600160) (600160)
The profit increased significantly compared with the same period last year, and the cost advantage of fluorine chemical raw materials was significant. It was optimistic about the subsequent projects under construction and maintained the overweight rating.
Key points supporting rating
The profit increased significantly compared with the same period last year. In 2021, the company expects to realize a net profit attributable to the parent company of RMB 1.010 billion – 1.190 billion, with a year-on-year increase of 959% - 1148%; In the fourth quarter, the net profit attributable to the parent company is expected to be 752-932 million yuan in a single quarter, with a significant year-on-year increase of 1155% - 1456%. Performance exceeded expectations.
The overall price of products rose, and fluorine chemical raw materials increased significantly. Affected by the stable recovery of the global economy from the low base in 2020 and the strong recovery of China's economy, the market demand for fluorine chemical products has expanded, the product prices have risen across the board, and the equivalent ratio of fluorine chemical raw materials, fluoropolymer materials and refrigerants has increased greatly. Among them, the price of fluorine chemical raw materials increased by 80.91%, the price of refrigerants increased by 41.58% (including the price of HFCS increased by 42.31%), the price of fluoropolymer materials increased by 48.04% and the price of fluorine fine chemicals increased by 6.27% year-on-year. The price of fluorite, the main raw material, decreased by 2.64% year-on-year, improving the profitability. In terms of production and sales, the external sales volume of fluorochemical raw materials decreased by 19.68%, the external sales volume of refrigerants increased by 2.63% (the external sales volume of HFCS increased by 3.23%), the external sales volume of fluoropolymer materials decreased by 2.58% (including the external sales volume of fluoropolymer increased by 27.98%) and the external sales volume of fluorofine chemicals decreased by 35.54% year-on-year. We believe that the sales volume of fluorine chemical related products may pick up in 2022, and the profit will continue to rise.
Greatly expand the capacity of VDF, PVDF and supporting R142b. The second phase of 10kt / a PVDF under construction is 6.5kt/a, which is expected to be completed in the first half of 2022. On December 3, 2021, the company disclosed the announcement of fixed asset investment projects. It plans to invest 979 million yuan and 693 million yuan respectively, add 48kt / avdf technical transformation and expansion project, 30kt / apvdf technical transformation and expansion project (phase I) and 23.5kt/apvdf project. The project is expected to be completed and put into operation in the fourth quarter of 2023. In addition, according to SSE e interactive, the company's 10kt / a PVDF project has been completed with 3.5t/a, and the remaining 6.5kt/a is expected to be completed in the first half of 2022. The main unit of the remaining 13kt / ahcfc-142b project supporting PVDF unit has been put into operation. After the completion of several projects, the competitive advantage will be further improved, laying a solid industrial foundation for becoming a world-class fluorine chemical enterprise.
Valuation
Raise profit forecast. It is estimated that the earnings per share from 2021 to 2023 will be 0.39 yuan, 0.53 yuan and 0.83 yuan respectively. At present, the corresponding P / E ratio of the stock price is 29.6, 21.8 and 13.9 times respectively. It is optimistic that the company's subsequent fluorine chemical industry boom will continue, the competitive advantage will continue to improve, and the overweight rating will be maintained.
Main risks of rating
The third generation refrigerant quota allocation scheme, and the product price fluctuates greatly.
