Jiutian Chemical - CGS-CIMB Research 2022-01-19: 4Q21F Likely A Blowout Quarter

Jiutian Chemical - 4Q21F Likely A Blowout Quarter

  • Favourable market conditions boosted dimethylformamide (DMF) prices to a new high in 4Q21, while input costs were helped by China’s curbs on coal prices.
  • We believe 4Q21F was the strongest quarter in Jiutian Chemical (SGX:C8R)’s operating history. We expect Jiutian Chemical to report a record core net profit of RMB129m (+127% q-o-q, +50% y-o-y) for 4Q21F as profit spread further widens.
  • We reiterate ADD call on Jiutian Chemical at a higher target price of S$0.15, based on 5.7x CY23F P/E (a 20% discount to SGX-listed peer China Sunsine (SGX:QES)).
  • DMF prices could remain elevated in 1H22F. Potential re-rating catalysts for Jiutian Chemical include a higher dividend payout in May.

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 2022-01-19
SGX Stock Analyst Report ADD MAINTAIN ADD 0.150 UP 0.140

Read also CGS-CIMB's most recent report:
2022-02-28 Jiutian Chemical Group - A High-Octane Performance

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