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Changhai shares: weak demand earnings under pressure, waiting for the industry boom recovery

The company's 2023Q1-3 revenue was 1.988 billion yuan, down 13.43 percent year-on-year, net profit attributable to 0.288 billion yuan, down 52.20 percent year-on-year, and net profit after non-return to the parent company was 0.266 billion yuan, down 49.27 percent year-on-year. Among them, the company's revenue in Q3 was 0.681 billion yuan, down 10.36 percent from the same period last year; net profit attributable to 0.077 billion yuan, down 55.55 percent from the same period last year; and net profit after deducting non-return to the parent was 0.071 billion yuan, down 53.06 percent from the same period last year.

Weak demand prices are under pressure, and revenue profits fell month-on-month.

On the demand side, from the export data, the export of 2023Q3 glass fiber and its products was 469500 tons, up 14.19 percent year-on-year, while the domestic demand was weak, and the price of glass fiber fell sharply year-on-year. According to Zhuochuang data, the average price of 2023Q3 alkali-free glass fiber roving yarn was 4193 yuan/ton, down 16.24 percent year-on-year. On the whole, the price of the company's 2023Q3 products is also expected to decline significantly, and the business and performance will decline to varying degrees, with a year-on-year decrease of 10.36 and 55.55 respectively.

Falling prices compress margins and scale effects weaken cost rates.

2023Q3 Company's gross profit margin was 24.05, down 6.43pct year-on-year, net interest rate was 11.36, down 11.57pct year-on-year. The decline in gross profit margin and net interest rate was mainly due to the moderate economic recovery since 2023, and the overall demand did not increase significantly. However, the full production capacity of the supply side put into production in 2022 brought about an increase in supply, the price of products fell under mismatch between supply and demand, and demand, and demand, and demand, and natural gas prices increased year-on year-on year-on year-on year. Specifically at the expense end, the 2023Q3 company's period expense rate was 12.19 percent, up 5.34pct YoY. Among them, the sales expense rate was 2.50 percent, up 0.26pct YoY, the management expense rate (including research and development) was 8.96 percent, up 1.32pct YoY, and the financial expense rate was 0.73 percent, up 3.76pct YoY.

Layout of industrial chain integration, build differentiated competition.

Through mergers and acquisitions and industrial integration, the company has formed a vertical industrial chain based on glass fiber and related products, and a horizontal industrial chain based on subsidiary Tianma Group chemical products and FRP products. At the same time, the company optimizes the allocation of relevant business resources, reduces the cost of raw materials and related expenses, and incorporates the operation and management of subsidiaries and technology research and development into the company's overall planning, so that the two sides can learn from each other, coordinate resources and improve together, so as to enhance the company's market competitiveness. At present, the company has a production capacity of 300000 tons of glass fiber yarn, 100000 tons of unsaturated polyester resin, glass steel products and glass fiber products production capacity, and the industry's leading products travel differentiation competition.

Economic recovery is the basis of the industry's business climate, urban villages to accelerate the landing of the economy or steady recovery.

In recent years, the glass fiber industry has continuously improved the cost performance of products through technological innovation, intelligent manufacturing and other measures, expanded application fields, enhanced the substitution of traditional materials, and penetrated into all components of the national economy. According to the data in recent years, the ratio of glass fiber growth rate to GDP growth rate is about 1.5-2.0, Therefore, economic fundamentals are the basis of industry prosperity. Next year, the accelerated landing of urban villages is expected to bring about a rebound in real estate sales, thus bringing about an overall economic recovery and boosting demand for fiberglass.

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Profitability further weakened, but Changhai is already a top student in the fiberglass industry.

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Profitability further weakened, but Changhai is already a top student in the fiberglass industry.