CJS(SH:600176) Guoxin Securities·2024-08-26 12:40Investment Rating - The investment rating for the company is "Outperform the Market" [4][19]. Core Views - The company has shown a recovery in profitability in Q2 2024, with a sequential improvement in earnings despite a year-on-year decline in revenue and net profit due to low fiberglass prices [5][19]. - The company continues to expand its production capacity and optimize its structure, which is expected to enhance its competitive advantage in the fiberglass industry [19]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 7.739 billion yuan, a year-on-year decrease of 1.16%, and a net profit attributable to shareholders of 961 million yuan, down 53.4% year-on-year. The earnings per share (EPS) was 0.24 yuan, exceeding previous forecasts [5][19]. - Q2 alone saw revenue of 4.357 billion yuan, an increase of 4.77% year-on-year, while net profit was 611 million yuan, a decrease of 46.5% year-on-year [5][19]. - The average price of the main product, 2400tex winding direct yarn, was 3,387.14 yuan/ton, down 10.19% year-on-year, with a recovery in prices noted since Q2 [5][19]. Sales and Market Share - The company reported a significant increase in sales volume, achieving 1.5221 million tons of roving and products, up 22.6% year-on-year, and 458 million meters of electronic cloth, up 12.5% year-on-year [5][19]. - The revenue from fiberglass and products was 7.6 billion yuan, a slight increase of 0.4% year-on-year, outperforming the industry growth rate [5][19]. Profitability and Cost Structure - The overall gross margin for H1 2024 was 21.5%, a decrease of 7.9 percentage points year-on-year, with a net profit margin of 12.8%, down 14.5 percentage points year-on-year [5][19]. - The company experienced an increase in expense ratios due to foreign exchange losses, with total expenses at 10.3% of revenue, up 1.6 percentage points year-on-year [5][19]. Future Outlook - The company is expected to maintain its leading position in the fiberglass market, with projected EPS for 2024-2026 at 0.57, 0.77, and 0.91 yuan per share, respectively, corresponding to price-to-earnings (PE) ratios of 18.0, 13.4, and 11.3 times [19][20].