Guotai Junan: Maintain luyang energy conservation (002088.SZ) "overweight" rating target price of 35 yuan

Zhitong Finance app was informed that Guotai Junan issued a research report to maintain the "overweight" rating of Luyang Energy Conservation (002088.sz), with a target price of 35 yuan, maintaining the net profit attributable to the mother in 2021-23 of 5.3/6.5/790 million yuan, corresponding to EPS1.04/1.29/1.56 yuan.

Event: In the first three quarters, the revenue was 2.285 billion yuan, an increase of 51.49%, the net profit attributable to the mother was 404 million yuan, an increase of 82.03%, corresponding to the income of 838 million yuan in the third quarter of the single, an increase of 34.75%, and the net profit attributable to the mother was 146 million yuan, an increase of 41.48%.

Guotai Junan's main views are as follows:

The cost transfer ability is strong, and the order in hand is full

The company's q3 gross profit margin of 34.72%, -0.59pct, in the case of high raw fuel prices, the profit margin remains stable, the bank believes that it is mainly due to the company's new contracted ceramic fiber order price increase smoothly, the company's main downstream is still based on petrochemical, metallurgy- Net margin was 17.4% +0.17pct sequentially, primarily due to an increase in VAT refundable income from other benefits in Q3. Judging from the order situation, the contract liabilities at the end of the third quarter increased by 61.14 million yuan compared with the beginning of the year, an increase of 37.29%, and the increase in the pre-receipt payment for unfinished construction projects indicates that the follow-up order support is sufficient.

Under the background of dual control, the company's competitiveness is highlighted

The production capacity of the same industry in Shandong region cannot be started normally due to the impact of policies, and the company has significant advantages in production technology, equipment, energy consumption control, etc., and the comprehensive cost is leading. Since August 20, the company's main production line has been in full load, and the first phase of the Luyang expansion project in Inner Mongolia has been implemented for 40,000 tons.

The debt structure is stable, and high dividends build a margin of safety

At the end of the period, the company's book cash was 500 million yuan, the interest-bearing liabilities were cleared, and the asset-liability ratio was about 29.7%, down 2pct from Q2. In the past three years, the company has maintained a high dividend rate of about 70-80%, with a high margin of safety.

Risk Warning: The progress of the refining project is not as expected.