The company releases the first half of 2021PerformancePre-increaseannouncement, It is expected to be vested in the first half of 2021Net profit2.287-2.668 billion yuan, an increase of 200%-250%, the second quarter attributable net profit of 1.223-16.04 billion yuan, an increase of 170%-254%, a ring increase of 15%-51%; it is expected that the deduction will be realized in the first half of 2021 Non-attributable net profit was 2.076-422 billion yuan, an increase of 200-250%. The deduction of non-attributable net profit in the second quarter was 1.017-13.63 billion yuan, an increase of 181%-276% and a ring increase of -4%-29%. The boom in the glass fiber industry continues, domestic demand is strong, and overseas demand has also improved significantly. We continue to be optimistic about the company’s full-year performance flexibility and maintain a “buy” rating.
The high profits are mainly due to the rise in glass fiber prices, which are expected to remain high in the second half of the year. In the first half of 2021, the high prosperity of the glass fiber industry continued. According to Zhuo Chuang Information, the average price of alkali-free roving (including tax) in the first half of the year was about 7,289 yuan/ton, an increase of about 37%. The average price of electronic cloth (including tax) was about It was 7.3 yuan/m, an increase of 111.2%. The increase in product selling prices was the main reason for the company’s high profitability. In the second quarter alone, the price of glass fiber continued to rise. The price of alkali-free roving increased by 18.4%, and the price of electronic cloth increased by 31.7%. Looking at the second half of the year, although the industry’s production capacity will be gradually released, it is relatively slow and the production progress is still uncertain. Under the situation that the domestic market demand remains strong and the overseas market continues to recover (the company’s overseas base inventory has fallen sharply, and prices continue to rise) , It is expected that supply and demand will still maintain a tight balance, and the price of glass fiber is expected to remain high, supporting the company’s annual performance.
Continuously release production capacity to reserve sales flexibility for the future. The company’s Tongxiang base 60,000 tons of electronic yarn intelligent second line (supporting 300 million meters of electronic cloth) and 150,000 tons of roving intelligent third line were ignited in mid-March and mid-May respectively. The new production capacity is expected to contribute little to the first half of the year, and the contribution is mainly concentrated In the second half. Under the background of stable prices, sales growth is expected to be the main source of growth in the second half of the year. It is expected that 150,000 tons of thermoplastic chopped strands and 100,000 tons of electronic yarn (supporting 300 million meters of electronic cloth) will be put into production in Tongxiang Base next year. In the future, the company’s production capacity will continue to expand, maintaining the world’s number one position in the field of roving, and doing business in the field of electronic cloth. The market share is expected to increase further when it reaches the top position in the world.
Thermoplastics and electronic cloth support the company’s performance, and wind power has room for improvement in the future. From the perspective of product structure, thermoplastics, wind power, and electronic cloth are the troikas that will support the future growth of Jushi. In the first half of the year, both thermoplastics and electronic cloth maintained rapid growth, and the price increase was much higher than that of general categories, supporting the company’s performance growth. In the long run, under the light of automobile lightweight, industrial intelligence, and home intelligence, the demand for thermoplastics and electronic cloth has a high degree of certainty; in addition, under the goal of carbon neutrality, wind power as a clean energy has broad development space. The decline in power generation costs will drive the demand for glass fiber, and there is room for improvement in the performance of wind power products.
Risk factors: weak recovery of overseas demand, upgrading of overseas trade protection, listing of new fiberglass companies, and increased motivation for expansion.
Investment advice: It is expected that the supply and demand of the glass fiber industry will remain at a relatively good level in the next two years, and the industry’s cyclical attributes will weakenChinese megalithIncrease the market share through capacity investment, enter a new round of cold repair cycle, further reduce costs and optimize product structure, and continue to achieve its own alpha enhancement. Since 2018Chinese megalithThe electronic yarn and electronic cloth business that began to focus on the layout will create a second growth curve. We maintain the company’s 2021-2023 attributable net profit forecast of RMB 4.792/51.76/ 5.988 billion, corresponding to the EPS forecast of RMB 1.20/1.29/1.50. With reference to the company’s historical valuation center, we give 22 times PE in 2021, corresponding to a target price of RMB 26. Maintain “Buy” rating.
(Article Source:CITIC SecuritiesCo., Ltd.)
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