China fiberglass: structural optimization and scale efficiency improvement, profit space
The medium and long-term trend growth of the industry improves the growth power of the company
From 2008 to 2012, the compound annual growth rate of China's fiberglass revenue was 6.16%. It is expected that the global fiberglass market will grow at an average annual growth rate of 7% from 2011 to 2016. The characteristics of industry capital and technology intensity make it difficult to break the pattern of oligarch competition, and the company's revenue growth will be supported.
Fiberglass has excellent performance and wide application:
Fiberglass has excellent physical and chemical properties. It is usually used as reinforcement, insulation and thermal insulation materials of composite materials. It is used in construction, transportation, electronics and electrical, industrial equipment, wind power generation and other fields. It plays an increasingly obvious role in replacing traditional materials such as steel, wood and cement.
The downstream demand potential is huge, boosting the development of fiberglass industry:
With the economic recovery of traditional industries such as transportation and construction and the rapid development of emerging industries such as wind power and electronic equipment manufacturing, the demand for fiberglass and its composites will be driven. From 2011 to 2016, the global fiberglass market is expected to grow at an average annual rate of 7%. By 2016, the global demand for fiberglass is expected to reach 6.74 million tons.
Setting up production lines overseas is both a challenge and an opportunity:
At present, China's fiberglass Jushi Egypt's annual output of 80000 tons of fiberglass production line is stepping up construction, and Jushi America's annual output of 100000 tons of alkali free fiberglass production line plan is also advancing steadily. Overseas production lines and domestic production lines will complement each other in avoiding trade risks, reducing costs and opening up markets, which is a key step for China's fiberglass to go global.
Valuation judgment and rating Description:
We predict that the company's EPS in 2013 / 14 / 15 will be 0.32/0.53/0.68 yuan, corresponding to the current share price of 7.37 yuan, and PE will be 23.2, 13.9 and 10.8 times respectively. In view of the company's leading position in the industry and in the period of product structure adjustment and upgrading, we give the company a PE of 17 times in 2014 and a "recommended" rating.
