CJS(SH:600176) Dongxing Securities·2024-10-29 03:31Investment Rating - The report maintains a "Strong Buy" rating for China Jushi Co., Ltd. [3][6] Core Views - The company reported a revenue of 11.632 billion yuan 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 yuan [3][4] - The company has started a price recovery since the second quarter of 2024, with sales prices improving compared to the first quarter, driven by strong demand in wind power and thermoplastic short-cut products [4][6] - The company’s gross margin stabilized at 28.18% in Q3 2024, an increase of 1.04 percentage points year-on-year, after a continuous decline since 2021 [4][5] Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved a gross margin of 23.74%, down 4.93 percentage points year-on-year, significantly lower than the high of 46.21% in the same period of 2021 [5][10] - The company’s operating cycle improved to 175.10 days, a decrease of 10.35 days year-on-year, indicating better inventory turnover [5][10] Market Demand and Growth - The cumulative installed capacity of wind power in China reached 39.12 million kilowatts from January to September 2024, a year-on-year increase of 16.85%, contributing to the demand for the company’s products [4][6] - The demand for new energy vehicles also increased, with production rising by 33.8% year-on-year in the same period, further boosting the demand for thermoplastic short-cut products [4][6] Future Outlook - The company is expected to achieve net profits of 2.119 billion, 2.700 billion, and 3.698 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 0.53, 0.67, and 0.92 yuan [6][10] - The current stock price corresponds to PE ratios of 21.18, 16.62, and 12.14 for 2024, 2025, and 2026, indicating strong growth potential [6][10]