CJS(SH:600176) Soochow Securities·2024-08-24 08:00Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's Q2 performance shows a significant recovery, with revenue and net profit improving compared to Q1, driven by increased demand in the wind power, automotive, and home appliance sectors [2][8] - The company has successfully implemented price increases across its products, leading to a notable revenue growth of 28.8% quarter-on-quarter in Q2 [2][8] - The new production capacity at the Huai'an base is expected to enhance the company's leading position in the industry [2][8] Financial Performance Summary - For H1 2024, the company reported total revenue of 77.4 billion yuan, a slight decrease of 1.2% year-on-year, while net profit dropped by 53.4% to 9.9 billion yuan [2][8] - Q2 2024 saw revenue of 43.6 billion yuan, representing a year-on-year increase of 4.8%, while net profit was 6.1 billion yuan, down 46.5% year-on-year [2][8] - The company achieved a gross margin of 22.6% in Q2, an increase of 2.4 percentage points from the previous quarter [2][8] Sales and Market Dynamics - The company experienced a year-on-year increase in sales volume for fiberglass and related products, with sales of raw yarn and electronic yarn rising by 22.6% and 24.2%, respectively [2][8] - The industry has seen a positive price recovery, with mainstream prices for direct yarn and electronic cloth increasing significantly in Q2 [2][8] Capital Expenditure and Financial Structure - Capital expenditure has slowed due to a decrease in cash levels, with cash outflows for fixed assets amounting to 6.3 billion yuan in H1 2024, down 2.1 billion yuan year-on-year [2][8] - The company's debt-to-asset ratio improved to 42.7% by the end of H1 2024, a decrease of 1.0 percentage point year-on-year [2][8] Future Outlook - The company is expected to benefit from its cost advantages and increased market share as it continues to invest in new production capacity [2][8] - The forecast for net profit for 2024-2026 is set at 25.2 billion yuan, 34.7 billion yuan, and 45.0 billion yuan, respectively, with corresponding P/E ratios of 16.3, 11.9, and 9.2 [2][8]