Financial circle network on August 8 news Jinjing Technology (600586.SH) on the evening of the 6th disclosed the "best semi-annual report report card in history" shows that thanks to the strong demand to raise the price of products and the sale of related assets, in the middle of 2021 to achieve operating income of 3.344 billion yuan, an increase of 53.54% year-on-year; net profit attributable to shareholders of listed companies of 783 million yuan, an increase of 930.52%, after deduction of non-attributable net profit of 660 million yuan, an increase of 861.76%.
It is worth noting that in the context of the industry's concentrated carbon peak and carbon neutrality, Jinjing Technology has taken photovoltaic glass and building energy-saving glass as the key development direction in the future. As the earliest production of ultra-white glass in China, the earliest entry into the field of photovoltaic glass production and has been positioned in differentiated, high-end products of Jinjing Technology, is expected to usher in better development opportunities.
Supply and demand boom to boost profit space
Jinjing Technology, formerly known as Zibo Jinjing Float Glass Factory, mainly engaged in the production and sales of ordinary float glass, listed on the Shanghai Stock Exchange in 2002, after listing, the use of the capital market to strengthen the layout of the industrial chain, the current business has covered ordinary float glass, ultra-white glass, deep processing glass, soda ash and other plates, and actively layout the photovoltaic glass plate, thus embarking on a production gradual scale and product upgrading iteration of the fast track.
From the following figure, the analysis of financial report data in previous years shows that the interim revenue in 2021 is the highest reported level in history, while the revenue growth rate has also reached its peak in the past 5 years, an increase of 53.54% year-on-year.
Drafting: Institute of Listed Companies in the Financial Sector Source: Choice
Looking at the trend of net profit attributable to the mother and net profit after deducting non-attributable in the following chart in the past 5 years, the growth trend of the two is basically the same, and both have achieved substantial growth this year. Especially from the perspective of growth rate, after achieving a high growth rate of 455% in 2017, the profit growth rate gradually declined until the highest growth rate of 861% in the middle of this year.
For the reasons for the substantial growth in revenue and net profit, Jinjing Technology said in the interim performance forecast disclosed on June 29 that there are three main aspects, one is the impact of the main business; the second is the impact of non-recurring profit and loss; and the third is the relatively low base last year.
For the impact of the main business, Jinjing Technology said in the report that the company's main products are glass and soda ash, which have shown a high boom in supply and demand and rising prices in the first half of the year, thus driving the company's product sales and selling prices to maintain a good level. Although production costs have also increased significantly in the same period, the high price operation still ensures that the company's profitability has increased significantly.
For the impact of non-recurring gains and losses, Jinjing Technology said that it included the sale of the equity of sinoma Jinjing, an associated company, to obtain a gain of 81.16 million yuan, to receive government subsidies of 75 million yuan in the current period, and an income tax impact of -30.91 million yuan, a total of 125 million yuan, an increase of 68% over last year.
Industry leaders enjoy the reform dividend
In fact, as a leader in the glass and soda ash industry, the development momentum presented by Jinjing Technology is the industry dividend brought about by the supply-side reform. Since 2015, supply-side reform, three to one reduction and one supplement have become the main line of policy to guide the manufacturing industries such as building materials and chemical industry. Under the guidance of this policy, some low-end production capacity can be cleared, the industry production capacity has been effectively controlled as a whole, for those leading enterprises in the industry with large-scale production advantages, they can quickly occupy the supply of high-end markets by adjusting the product structure in a timely manner, exerting force on high-end products, thus winning a period of opportunity for rapid development for enterprises.
Jinjing Technology has seized this favorable opportunity to accelerate development. As early as the 2018 Shandong Provincial Listed Companies High-quality Development Seminar, Wang Gang, chairman of Jinjing Technology, said that with the in-depth promotion of the national supply-side structural reform, Jinjing Technology's leading role as a leading enterprise in the glass and soda ash industry will become larger and larger, and the profitability of enterprises will become stronger and stronger.
This is even more vivid in 2021. On the one hand, in the context of carbon neutrality, the prices of the main raw materials and fuels for glass production are easy to rise and fall, and the production costs are constantly rising. On the other hand, through the implementation of the product structure differentiation strategy, Jinjing Technology has the production capacity of high value-added products such as ultra-white, color glass and coated glass, which can meet different market demands, and the price of products has increased significantly, overcoming the unfavorable factors of rising costs.
At the same time, Jinjing Technology to take advantage of the momentum, with the help of the photovoltaic industry in the demand expansion and policy support of the rapid development momentum under the two-wheel drive, Jinjing Technology will be photovoltaic glass products as a new product development direction, the development of a unique high transmittance, can be used as the substrate of solar thermal and photoelectric conversion system ultra-white glass, and actively layout ningxia and Malaysia two photovoltaic glass production lines, thereby further enhance the product profit margins.
This can be seen in the performance of the gross profit margin level of the enterprise. As shown in the figure below, from 2017 to 2019, the gross profit margin of Jinjing Technology remained above 20%, and the gross profit margin in 2020 fell to 15%, returning to a high point of 32% this year. This level is also the highest gross profit margin since the listing of Jinjing Technology. Correspondingly, glass prices have been rising since the first half of this year to create new highs in recent years, with an increase of 23% in 2021.
High profitability has led to an increase in the return on net assets. During the 2017-2020 interim report period, its ROE (dilution) level fluctuated between 2-6%, while in mid-2021 it reached 15.66%, which is a high level in the general manufacturing industry.
In addition to enjoying the dividends of supply-side reform because of the advantages of large-scale production, the competitive advantage of Jinjing Technology is also reflected in its unique industrial model. Since the two types of glass and soda ash products belong to the building materials and chemical industries respectively, it happens to be the upstream and downstream of the industrial chain, which makes Jinjing Technology can adopt the business model of self-production and self-sales. This model helps to control costs.
Jinjing Technology said that in order to solve the problem of rising costs, the company actively expands the procurement channels of related raw materials, while increasing the adjustment of product structure and product conversion efficiency, improving product added value and improving profitability through differentiated products; through technology research and development, equipment transformation, under the premise of maintaining equipment operation efficiency, reduce the operating costs of environmental protection facilities.
In addition, in the first half of this year, Haitian Company, a soda ash production company, maintained the advanced and stable equipment through technological progress, and benefited from stable production and high yield; reduced raw material unit consumption through technological progress and optimized process operation management, and increased profits by reducing manufacturing costs; and reduced labor labor, labor costs, and labor productivity through the use of advanced automation control and the construction of intelligent factories.
Looking forward to the second half of the year: photovoltaic glass and energy-saving glass are expected to become new profit growth points
Jinjing Technology's outstanding performance in 2021 has attracted the attention of the capital market, and a number of research institutions have issued reports to look forward to its performance in the second half of 2021.
On the one hand, as the institution is still optimistic about the glass and soda ash price boom in the second half of the year, it is still optimistic about the performance prospects of the current business of Jinjing Technology. Tianfeng Securities Research Report pointed out that the current high prosperity of the glass/soda ash industry is expected to be maintained, especially the price of soda ash will rise in the second half of the year, and the industry is still expected to maintain a high prosperity in 22 years. Huaxi Securities Research Report believes that in the context of the high prosperity of the industry, Jinjing Technology's own hematopoietic ability has been greatly strengthened, achieving a positive cycle of development, and its performance in the second half of the year may still exceed market expectations.
In this regard, Jinjing Technology also gave optimistic expectations in the annual report. According to the inventory situation of glass production enterprises in 13 provinces statistics by Zhuo Chuang Information, it is predicted that the second half of the year, especially in autumn and early winter, is still a destocking cycle, and the low inventory situation of glass companies will remain for a period of time, which will support the glass price will still remain rising; in addition, due to the high expectation of photovoltaic glass production, soda ash demand is expected to be optimistic in the long term, and the confidence and amplitude of soda ash price increases in the second half of the year will increase significantly, and even the possibility of continuous sharp increases is not ruled out.
On the other hand, Jinjing Technology actively explores emerging markets for photovoltaic glass and energy-saving building glass, and further improves the product structure and thickens the profit margin with high-value-added high-end products. Because these two areas are in line with the policy direction of carbon peaking and carbon neutrality, there is both market demand and policy support. At present, the investment of Jinjing Technology in the early stage has gradually entered the harvest period.
In terms of photovoltaic glass, on July 2, Jinjing Technology announced that it began to invest in the construction of Malaysia 500t/d thin-film photovoltaic module backplane glass and supporting wire tempering deep processing production line, of which 5 deep processing production lines supporting wire tempering have been officially put into operation. Has two photovoltaic glass production bases in Ningxia and Malaysia,
In the energy-saving glass industry, coated glass, which is a major component of energy-saving buildings, has also begun to contribute to its performance. Jinjing Technology Headquarters 550T/DLOW-E coated glass production line has been successfully ignited, and the products will be applied to the field of BIPV. At present, the company has industry-leading double silver and three silver coated energy-saving glass, production process and product performance fully meet the green building or zero carbon building supporting glass standard requirements.
Jinjing Technology said that in the second half of 2021, the company will continue to promote the design and establishment of Jinjing digital pipe center design and formation projects, low-cost and high-performance photovoltaic/solar thermal glass research and development progress, while developing photovoltaic building integration supporting new products. Focusing on customer needs, we continue to develop energy-saving building products based on double silver/three silver Low-e. Strengthen exchanges and cooperation with external universities, research institutes or other scientific research units, solve the current technical problems, stabilize product quality, improve yield, and reduce production costs.
This article originated from the Financial Circle Network