Main points of investment:
China Jane Science and Technology disclosed the third quarterly report of 2022: the company's total operating income in the first three quarters of 2022 was 519 million yuan, an increase of 72.8 percent over the same period last year; its net profit was 320 million yuan, an increase of 120.8 percent over the same period last year; and earnings per share was 0.75 yuan.
The company achieved a total operating income of 519 million yuan in the first three quarters of 2022, an increase of 72.8% over the same period last year, and a net profit of 320 million yuan, an increase of 120.8% over the same period last year. Earnings per share were 0.75 yuan, with rapid growth. Of this total, the company's 2022Q3 achieved an operating income of 204 million yuan in a single quarter, an increase of 105.55% over the same period last year, and a net profit of 136 million yuan, an increase of 165.06% over the same period last year.
The company's second phase of the project has fully reached production, and the third phase of the planned additional investment project has been gradually put into construction, and the capacity bottleneck has been significantly improved, leading to a substantial increase in the company's delivery capacity. The company announced in March 2022 that the company and customer A recently signed a "product order contract", the contract implementation period is from 2022 to 2023, specifically according to the customer delivery plan. The total contract amount is 2.169 billion yuan, accounting for 526.71% of the company's operating income in 2021. The delivery of large new orders signed this year has led to rapid growth in performance this year.
Scale effect led to a significant decline in various expense rates, and profitability increased significantly. The overall gross profit margin of the company in the third quarter of 2022 was 74.28%, which decreased 4.42pct compared with the same period last year, of which Q3 gross profit margin was 77.97%, which decreased 0.32pct compared with the same period last year and increased 2.9pct from the previous year. The main reason is the large-scale purchase of large customers, the price has been adjusted.
The overall net interest rate of the company in the third quarter of 2022 was 61.69%, a sharp increase in 13.42pct over the same period last year, of which Q3 net interest rate was 66.44%, a sharp increase in 14.94pct over the same period last year, and an increase in 0.38pct compared with the previous year. The main reason is that the scale effect has led to a substantial decline in the rate of expenses and a substantial increase in the profitability of the company. In 2022, the company reported sales, management, R & D and financial expense rates of 0.76%, 3.84%, 4.84% and-1.82% respectively, down 0.01,14.02,5.15 and 1.54pct respectively compared with the same period last year. The total expense rate of the four items was 7.62%, a decrease of 19.72pt compared with the same period last year. Benefiting from the scale effect of the company, the rate of management expenses and R & D expenses decreased significantly.
The company's weighted ROE for the third quarter of 2022 was 11.39%, a slight decline in 0.28pct compared with the same period last year.
Raise and put into production capacity + large orders to ensure certainty of performance
The application of aviation carbon fiber composites in military industry is gradually increasing. The company's ZT7 series carbon fiber products have taken the lead in stable batch application in the aviation and aerospace fields for many years, and the technical advantages accumulated over the years have been transformed into customer stickiness advantages, the cooperative relationship between the two sides is stable, and the company has become a major supplier of ZT7 series carbon fiber with major customers. With the release of military demand, the company's performance has entered a stage of rapid growth.
The company has completed the first and second phases of the 100-ton line and 1000-ton line, and the third phase of the project began to be built this year. By the end of the third quarterly report in 2022, the company's third phase of the project has made rapid progress, the construction of civil works has been completed by 95%, and the signing rate of equipment order contracts has exceeded 95%. With the production of the third phase of the project, the company will increase the production capacity of 1500 tons of carbon fiber + 3000 tons of raw silk + carbon fiber fabric, which has been greatly expanded.
Equity incentive conditions guide companies to start a stage of high growth
Equity incentives hit the ground, and high incentive conditions guide the company to start a stage of high growth. On October 13, 2022, the company issued an equity incentive plan (draft), which is proposed to grant 1.092 million restricted shares to the incentive target, of which 873000 shares will be awarded in the first incentive plan. the incentive target is 13 people, including senior managers, middle managers and business backbones, with a grant price of 23.36 yuan per share.
In this equity incentive plan, the company sets two conditions: target value and trigger value to evaluate the company's performance. with reference to the target conditions, the company's net profit from 2022 to 2025 is 4.33pm 7.04pm, 1.147 billion RMB, an increase of 115%, 63%, 29%, 27% and a compound growth rate of 38.36%. With reference to the trigger conditions, the company's return net profit from 2022 to 2025 was 4.13, 674, 865, 087 million yuan respectively, an increase of 105%, 63%, 28%, 26% and a compound growth rate of 38.07%.
This equity incentive is expected to have a long-term incentive effect on the company's performance growth, demonstrate the company's confidence in the persistence of medium-and long-term performance, and guide the company to start a high growth phase.
Profit forecast and valuation
In view of the fact that the company is the core supplier of high-performance carbon fiber for aviation equipment, benefiting from the growth of demand for new-generation aviation equipment and the great increase in demand for high-performance carbon fiber, the huge new orders signed in 2022 verify the prosperity of the demand of the main engine factory. The company continues to expand its production capacity to meet the strong demand of the aviation equipment market, and the company's performance is about to be released as the new capacity is put into production. We forecast that the company's operating income from 2022 to 2024 will be 874 million, 1.277 billion and 1.611 billion respectively, and the net profit forecast for 2022-2024 will be 472 million, 685 million and 864 million respectively, and the corresponding PE will be 49.95X, 34.4X and 27.28X respectively.
Risk tips: 1: aviation equipment demand, delivery is not expected; 2: fund-raising project progress is not expected; 3: carbon fiber procurement prices continue to decline significantly; 4: industry competition intensifies, market share decreases.