Core viewpoints

Jilin Chemical Fiber 2023 achieved revenue of 2.756 billion in the first three quarters, down 9.1% from the same period last year; realized net profit of 54 million, an increase of 161.6% over the same period last year; and the company's overall gross profit margin was 13.72%, with a net profit rate of 1.98%. Corresponding to 2023Q3 realized revenue of 1.033 billion yuan, down 11.6% from the same period last year, up 5.2% from the previous month; realized net profit of 6 million yuan from the same period last year, down 6.6% from the same period last year and 84.2% from the previous year; and the company's 2023Q3 gross profit margin was 14.73%, with a net profit rate of 0.56%. The company is currently the world's leading viscose filament manufacturer, at the same time actively to the carbon fiber industry layout, for the company to open up long-term growth space.

Event

On October 27, the company released its quarterly report for 2023: revenue in the first three quarters of 2023 was 2.756 billion, down 9.1% from the same period last year; net profit was 54 million, an increase of 161.6% over the same period last year; and net profit was 36 million yuan, an increase of 199.8% over the same period last year.

The company's overall gross profit margin is 13.72% and the net profit rate is 1.98%. Corresponding to 2023Q3 realized revenue of 1.033 billion yuan, down 11.6% from the same period last year, up 5.2% from the previous month; realized net profit of 6 million yuan, down 6.6% from the same period last year and 84.2% from the previous year; realized net profit of 4 million yuan after deducting non-return, down 20.3% from the same period last year and 86.3% from the previous year; and the company's 2023Q3 gross profit margin was 14.73%, and the net profit rate was 0.56%.

Brief comment

Carbon fiber profits are under periodic pressure. 23Q3 achieved revenue of 2.756 billion in the first three quarters of 2023, down 9.1% from the same period last year, realized net profit of 54 million, an increase of 161.6% over the same period last year, and realized net profit of 36 million yuan, an increase of 199.8% over the same period last year. The company's overall gross profit margin is 13.72% and the net profit rate is 1.98%. Corresponding to 2023Q3 realized revenue of 1.033 billion yuan, down 11.6% from the same period last year, up 5.2% from the previous month; realized net profit of 6 million yuan, down 6.6% from the same period last year and 84.2% from the previous year; realized net profit of 4 million yuan after deducting non-return, down 20.3% from the same period last year and 86.3% from the previous year; and the company's 2023Q3 gross profit margin was 14.73%, and the net profit rate was 0.56%. From the perspective of carbon fiber products as a whole, under the influence of the pattern of supply and demand, market prices have declined and phased pressure has appeared. according to Baichuan Yingfu, at the end of the third quarter, the prices of 12K, 24max 25K and 48max 50K in T300 were 87,000 yuan / ton, 80,000 yuan / ton and 72,000 yuan / ton respectively, compared with-37.86%,-40.74% and-41.46% respectively at the beginning of the year. In the long run, there is much room for improvement in carbon fiber demand. Through the layout of industrial integration, the company will gradually benefit from the stabilization of industry profits, the increase of penetration, the increase of application and the increase of overall demand.

Viscose filament is firmly in the forefront of the industry, and multi-layout helps the development.

At present, the company has grown into a leading viscose filament manufacturer in the world, with sufficient strength to deeply optimize product performance, accurately improve the differentiation rate of high-end products, increase revenue scale and profit scale, fill the gap in market demand and further expand competitive advantage, firmly stand in the leading position of the industry. In addition, the company has built a "12000 tons of carbon fiber composite" industrial project, actively to the carbon fiber industry layout, find the second growth curve, and open up the company's long-term growth space.

Profit forecast and valuation: the company's net profit in 2023,2024 and 2025 is expected to be 80 million, 180 million and 240 million respectively, EPS is 0.03,0.07 and 0.10 yuan respectively, and PE is 94X, 43x and 32x respectively. The company's profits are under pressure in the short term, and there is much room for improvement in carbon fiber demand in the long run. Through the layout of industrial integration, the company will gradually benefit with the stabilization of industry profits and the increase of demand. Maintain a "buy" rating.

Risk analysis.

(1) Industry cyclical risk: the chemical fiber industry has strong cyclical characteristics, and global macroeconomic fluctuations, especially the decline in market demand or periodic adjustment in the textile industry, especially in clothing and home textile industries, will directly lead to a decline in market demand for chemical fiber, which will have a greater adverse impact on the company's sales and net profit.

(2) operational risk: the global price of bulk raw materials fluctuates greatly, while the impact of the market downturn still exists, there is no explosive growth in demand and there are certain inventories in the same industry, and price repair and transmission still need to be observed. will have a certain impact on the company's next performance. (3) the risk of industrial transformation: due to the complex technological process, high R & D investment and long R & D and industrialization cycle of carbon fiber, there are only a handful of companies with real R & D and production capacity in the world. compared with foreign advanced carbon fiber manufacturers, there is a gap between domestic carbon fiber industrialization technicians, production processes and equipment, and there is a certain risk of new product development. And due to the intensification of market competition, the application growth of domestic carbon fiber downstream products is also lower than expected.