Jiutian Chemical Group - Robust ASP Points To A Stronger 4Q21
- Jiutian Chemical (SGX:C8R)'s 3Q21 net profit of RMB57m (-19% q-o-q, +10% y-o-y) was in line with our expectations. Stronger profit spread offset weaker volume output.
- DMF prices hit a record high in Oct 21. Despite recent retracement, it stayed at elevated levels vs 3Q21, which should bode well for 4Q21F profit spread.
- We believe that recent share price correction has priced in potential impairment of loan to associate company.
- We reiterate our ADD call with a target price of S$0.14 for Jiutian Chemical, which remains pegged to 5.7x CY22F P/E (based on a 20% discount to SGX-listed peer China Sunsine (SGX:QES)).
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
Kenneth TAN CGS-CIMB Research | ONG Khang Chuen CFA CGS-CIMB Research | https://www.cgs-cimb.com 2021-11-11 2021-11-11
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