CJS(600176) Minsheng Securities·2024-10-25 07:30Investment Rating - The report maintains a "Recommended" rating for China Jushi (600176.SH) with a current price of 10.61 CNY, projecting dynamic PE ratios of 19x, 14x, and 12x for the years 2024, 2025, and 2026 respectively [5]. Core Views - The report highlights a recovery in gross yarn profitability, with structural strengths in exports and wind power yarns. The company reported a revenue of 11.632 billion CNY for the first three quarters of 2024, a year-on-year increase of 1.81%, while net profit attributable to shareholders decreased by 42.66% to 1.533 billion CNY [1][3]. Summary by Sections Financial Performance - For Q3 2024, the company achieved a revenue of 3.893 billion CNY, up 8.27% year-on-year, and a net profit of 572 million CNY, an increase of 6.38% year-on-year. The gross margin for Q3 was 28.18%, reflecting a 1.03 percentage point increase year-on-year and a 5.61 percentage point increase quarter-on-quarter [1][2]. Yarn Segment Analysis - The average price of winding direct yarn (2400tex) in Q3 2024 was 3682 CNY/ton, showing a slight increase of 0.9% year-on-year and 0.5% quarter-on-quarter. The industry inventory at the end of Q3 was 756,000 tons, with a quarter-on-quarter increase of 12.8% [2]. - The report anticipates a continued recovery in gross yarn profitability due to a stable price environment and strong pricing strategies from leading companies [2]. Electronic Fabric Market - The average price of electronic fabric (7628) in Q3 2024 was 4.01 CNY/m, reflecting a year-on-year increase of 13.7% and a quarter-on-quarter increase of 8.4%. The report notes a favorable supply-demand balance in the electronic fabric market, contributing to price stability [3]. Industry Trends - The report indicates strong price resilience in the yarn industry, with expectations for increased demand in Q4 2024, particularly due to the wind power season. The report also highlights the importance of exports and wind power yarns as key growth drivers [3]. Investment Recommendations - The report recommends continued investment in China Jushi, citing the company's strong pricing strategies, favorable supply-demand dynamics in electronic fabric, and potential growth from exports and wind power [3].