CJS(SH:600176) SINOLINK SECURITIES·2025-04-03 01:23Investment Rating - The report gives a "Buy" rating for the company, with a target price of 14.98 RMB based on a 17x valuation for 2025 [5]. Core Views - The company is a global leader in fiberglass, emerging from a cyclical bottom with a recovering gross margin [5]. - There is a structural recovery in fiberglass demand, with supply pressure testing nearing its end, indicating potential price increases [5]. - The company demonstrates exemplary cost control and a strong product structure, enhancing its core competitiveness [5]. Summary by Sections Company Overview - As of February 2025, the company has a total fiberglass production capacity of 2.89 million tons, with 2.59 million tons currently in operation and 270,000 tons of electronic yarn, holding a global market share of 25% and a domestic market share of 40% [15][16]. Demand Recovery - The demand for fiberglass is structurally recovering, particularly in wind power yarn, with a projected 164.1 GW of wind power equipment tendered in 2024, a 90% year-on-year increase [3][28]. - The company is expected to benefit from increased demand in electronic cloth and exports, particularly due to European infrastructure and renewable energy investments [3][41]. Supply Dynamics - The supply side is nearing the end of a pressure testing phase, with expectations of reduced new capacity in the second half of 2025, which may lead to upward price elasticity for mid-to-low-end fiberglass [3][45]. Cost Control and Competitive Advantage - The company maintains a leading gross margin due to advantages in cost structure, product mix, and strategic base layout [4][50]. - High-end products account for over 85% of the company's offerings, which helps mitigate the impact of price adjustments during downturns [4][53]. Profit Forecast and Valuation - The company is projected to achieve net profits of 3.53 billion, 4.21 billion, and 4.59 billion RMB for the years 2025, 2026, and 2027, respectively [5][62]. - The report anticipates a gradual increase in gross margins, with expected rates of 31.4%, 33.2%, and 33.7% for the same years [5][64].