The third quarter results turned around compared with the same period last year, and the carbon fiber application scene expanded to help future growth: the company released the third quarter report of 2022. In the first three quarters, the company achieved revenue of 3.032 billion yuan, + 15.76% year-on-year; net profit of-89 million yuan, year-on-year-6745.07%; and net profit of deducting non-return net profit of-36 million yuan. Year-on-year-1553.05%. In the third quarter alone, the company achieved revenue of 1.169 billion yuan, + 24.39% year-on-year; net profit of 6.1989 million yuan, + 115.72%; and deduction of 5.1628 million yuan, + 113.88%. The annual production line with an annual output of 600 tons of small tow carbon fiber prepared by the company's wholly-owned subsidiary Jilin Cameike has been completed and reached production. Jilin Baoji, which is 49% owned by the company, has been in a state of full production and sales mainly from the R & D, production and sales of large tow and low-cost carbon fiber. At present, carbon fiber has a good development momentum and broad prospects, especially in the civil large tow carbon fiber racetrack, the rapid growth of new power energy based on wind and light has driven the demand for civil large tow carbon fiber, and the market scale is considerable. With the gradual maturity of carbon fiber industry and the smooth progress of terminal application technology in recent years, the production cost has also been reduced, and large tow carbon fiber is expected to open more industrial use scenes in the future.

The integrated layout of carbon fiber can be expected in the future: Jilin Baodi, which is 49% owned by the company, has an annual output of 8000 tons of large tow carbon fiber, and Jilin Camick, a wholly owned subsidiary of the company, produces 600 tons of small tow carbon fiber. At the same time, the company raised funds through non-public offering to build an annual output of 12000 tons of carbon fiber composite extruding board project. the company expects that after the project is completed and reaches production, it will form a business income of 1.54 billion yuan per year. Guoxing carbon fiber: Jilin Guoxing carbon fiber mainly focuses on the large tow carbon fiber link. On May 8, 2020, it was officially assigned to Jilin Chemical Fiber Group, and the actual controller became the Jilin Municipal State-owned assets Supervision and Administration Commission. Before that, the Guoxing carbon fiber production line was relatively small. The group upgraded the original production capacity of 500t / a carbon fiber production line to about 1000 tons / year, and continued to expand production significantly in the follow-up, such as putting forward the production line planning of the 15000-ton carbon fiber project. The capacity was gradually released in August 2021, and the carbon fiber production capacity of Jilin Guoxing has reached 18000 tons / year by June 2022. At the same time, the Chemical Fiber Group has issued a commitment: within three years from March 18, 2022, the Chemical Fiber Group will take relevant measures in line with state-owned assets supervision and securities supervision, including injecting Guoxing carbon fiber control shares into listed companies, in order to further protect the interests of listed companies and minority shareholders. As the Jilin Economic and technological Development Zone, where the company is located, is a national carbon fiber high-tech industrial base, industrial agglomeration and matching have been formed in the upstream and downstream areas of the carbon fiber industry. at the same time, with the continuous decline in the manufacturing cost of carbon fiber and its composite materials, the downstream application space is expanded, and the company's integrated layout is expected to benefit from industry expansion for a long time in the future.

With the increase of wind power demand and permeability, offshore wind power has a stronger demand for carbon fiber materials. it is expected to become one of the core increments for the growth of carbon fiber materials: according to the forecast of the 2021 Global carbon Fiber Composites Market report, the carbon fiber required for wind power blades in China is expected to reach 80600 tons in 2025. In terms of offshore wind power, the offshore wind power market has obvious inherent advantages and great potential for market development. at present, the global wind power development is still dominated by onshore wind power. however, offshore wind power has the advantages of rich resources, high power generation efficiency, close to the load center, small occupation of land resources and low difficulty of large-scale development, so it is widely regarded as the future development direction of the power generation industry. And due to the high wind speed at sea, the single unit capacity of offshore fans is generally much higher than that of onshore turbines, which makes the demand for lightweight carbon fiber materials more intense.

Investment suggestion: in view of the high prosperity of downstream carbon fiber, the expansion of application scenarios, the increase of wind power demand and permeability, the integrated layout of carbon fiber and the prospect of future space, we estimate that the company's EPS from 2022 to 2024 will be 0.01,0.11,0.14 yuan respectively, and the corresponding PE from 2023 to 2024 will be 41 times and 32 times respectively. For the first time, coverage was rated as "overweight".

Risk hints: macroeconomic growth is lower than expected, trade disputes escalate, manufacturing downstream industry demand is lower than expected, carbon fiber demand is lower than expected risk, statistical errors, forecast parameters, assumptions are less than expected risk.