Today, the market tried to stop falling and rebound in early trading, but fell into weakness again in the afternoon. As of the close, the Shanghai Stock Exchange Index fell 0.44%, the Shenzhen Component Index fell 0.13%, and the ChiNext Index rose 0.48%.

Hello everyone, welcome to Yansong Classroom. I am Liu Yansong, the class speaker!

The market tried to stop falling and rebound in early trading today, but fell into weakness again in the afternoon. As of the close, the Shanghai Stock Exchange Index fell 0.44%, the Shenzhen Component Index fell 0.13%, and the ChiNext Index rose 0.48%.

More than 3,300 stocks fell in the two cities, market transactions further shrunk to 614.7 billion, and the overall sentiment was relatively sluggish. In the

sector, pharmaceutical stocks became active again, with chain drugstores and CRO concepts leading the gains; tourist attractions and real estate sectors were among the top losers.

is approaching the holiday, and the willingness of funds to be long is not strong. The main reason is the group speculation of hot money on the market. At this stage, you can continue to wait patiently.

After talking about today’s market performance, let’s continue our Taobao series. Friends who don’t know our Taobao plan can take a look: "

The carbon fiber industry continues to grow

In 2021, the global demand for carbon fiber will continue to grow. According to the analysis of the "Global Carbon Fiber Composite Materials Market Report 2021", the demand for carbon fiber has maintained a stable growth trend in recent years. Compared with 36,000 tons in 2008, the demand for carbon fiber in 2021 will reach 118,000 tons, an increase of 227.8%, and a CAGR of 9.6%. Demand growth slowed down under the influence of the epidemic in 2020, but in the context of global economic recovery in 2021, carbon fiber demand increased by 10% year-on-year, returning to the average growth rate.

The domestic carbon fiber market demand is growing rapidly, exceeding the growth rate of global carbon fiber demand. As of 2021, China's total demand for carbon fiber is 62,000 tons (+27.7%). Compared with China's carbon fiber demand of 8,000 tons in 2008, the compound growth rate exceeds 17%. The average growth rate exceeds the global growth rate, indicating that China's carbon fiber market development is leading on a global scale.

At the same time, China's carbon fiber demand in 2021 will continue the rapid growth rate in 2020 (+29%), showing the popularity of the domestic carbon fiber industry in recent years.

The company's products are mainly for military use and are actively entering the civilian market.

The company's products are mainly used in military products. The sales revenue of military products to the top five customers accounts for more than 99% of the total operating revenue. The current main customers in the military products business are large domestic aerospace enterprise groups - the largest customer. In 2021, the company's sales to them accounted for more than 79%. ZT7 carbon fiber products have also been used in batches of eight major aerospace models in my country for many years.

company announcement and annual report both stated that the company's main customers of carbon fiber and carbon fiber fabrics are the military, and only a very small amount of products are provided to the civilian field. A high proportion of military products is conducive to stable operations, and as the aerospace field continues to develop at a rapid pace, order volume is expected to continue to rise, ensuring continued growth of the company's performance.

Zhongjian Technology recently made it clear in an institutional survey that the company has recently begun to actively promote the certification of commercial large aircraft. Currently, two new products have fully met the requirements of foreign prepreg . As the company's layout work for certification in related fields advances, the company will occupy an important position in the field of domestic large aircraft in the future.

According to statistics from the Qianzhan Industry Research Institute and the Manufacturing Industry Network, as of May 2022, the total number of orders for the C919 passenger aircraft , including confirmed orders and intention orders, has exceeded 800, and the number of ARJ21-700 orders has been close to 600. In 2022, China Eastern Airlines released a scheduled increase plan, planning to purchase 4 C919 passenger aircraft with a total value of 2.4 billion yuan. At the same time, the first C919 delivered to China Eastern Airlines successfully made its first flight, which means that the aircraft model has moved from the early research and development and testing stages to the delivery and operation stage. With the recovery of the civil aviation market, the order volume is expected to grow further.

According to statistics from the "China Civil Aircraft Market Forecast (2021-2040)" released by COMAC , my country's aviation market will receive 9,084 passenger aircraft with more than 50 seats, worth approximately US$1.4 trillion.Among them, there are 953 turbofan regional airliners with more than 50 seats, 6,295 single-aisle jet airliners with more than 120 seats, and 1,836 dual-aisle jet airliners with more than 250 seats. With the rise of domestic aircraft manufacturing technology and further breakthroughs in carbon fiber technology, the demand for carbon fiber in civil aviation will also become the main space for the development of the downstream market.

The company's production capacity has been significantly expanded, promoting continued growth in future performance.

The company originally only had a 150 tons/year (12K) or 50 tons/year (3K) high-performance carbon fiber production line. Due to the urgent demand for aerospace in the company's key product application fields, the company's sales orders have grown rapidly and the production capacity has become saturated.

In May 2019, the company raised 242 million yuan through IPO. Based on the existing carbon fiber production line, it expanded one of the company's raw fiber spinning lines and built a new T700 carbon fiber production line with a capacity of 1,000 tons/year (12K). In September 2021, the production line has completed the equivalence verification. In October 2021, the company released a private placement plan, intending to raise no more than 2 billion yuan to build two oxidation carbonization production lines with a combined annual output of 1,500 tons, forming an annual production capacity of 1,500 tons of high-performance carbon fiber and fabric products.

According to the company's 2022 semi-annual report, 90% of the civil engineering construction of this project has been completed, and the equipment order contract signing rate has reached 70%. The company is expected to complete the final assembly of an oxidation carbonization line and a raw silk line by the end of 2022, providing prerequisites for moving into the commissioning and small-batch trial operation phase in 2023Q1. As the investment projects are completed and production capacity is gradually released, the company's supply capacity will be further enhanced, which is expected to contribute to continued growth in performance.

Financial analysis

Zhongjian Technology achieved non-net profit of 296 million yuan in the third quarter, a year-on-year increase of 118.47%. Achieved revenue of 519 million yuan, and increased by 72.8% compared with in the same period last year. The operating performance has achieved substantial growth and the growth potential is good.

company’s current PE-TTM is 56.17 times, which means its valuation is on the high side. The current P/E ratio of and is at the low level of the historical average.

The Chacha scoring system shows that the company’s top executives and major shareholders have reduced their holdings in the past year. The overall rating is three and a half stars, which can be considered.

Summary:

The company is a leader in small tow carbon fiber for military use. It has developed multiple brands of carbon fiber products such as ZT7, ZT8, ZT9, M40J, etc., which are mainly used in the aerospace field, filling the gap in this field in my country. The company masters the entire industrial chain process from raw silk to carbon fiber fabrics.

In 2022, the company has large orders of 2.45 billion yuan, and its production capacity has experienced a triple jump of 120-450-2000 tons. The booming supply and demand have helped the performance grow rapidly. The scheduled third phase of the 1,500-ton dry-jet wet spinning project is expected to contribute performance in 2023 and achieve rapid growth in volume.