KGI reportJiutian Chemical Group Limited (C8R SP):

Raise TP to S$0.245 and expect to see another record year in FY22


RE-ITERATE BUY Entry – 0.100 Target – 0.110 Stop Loss – 0.095

Jiutian Chemical

Share price: 
10.7 c

Target:
 24.5  c

Jiutian is the second largest Dimethylformamide (DMF) producer in China, with a total annual capacity of 150,000 tons of DMF and methylamine (MA). Both these chemicals are important ingredients in industries as diverse as consumer goods, petrochemicals, electronics, pharmaceuticals and fertilisers. In addition, it now produces chemicals for fast growing sectors such as batteries that are used in electric vehicles.


Strong 1Q22 rests despite a surge in COVID cases. 

1Q22 revenue jumped by 76% YoY to RMB772mn. Net profit jumped by 123% YoY to RMB201mn.

The sales volumes could be less than last year during the same period as China started to adopt certain restriction measures to contain COVID-19 spreads in March, affecting logistics.

However, the average DMF prices ranged from RMB15,000/tonne to RMB16,000/tonne in 1Q22 compared to RMB9,000/tonne to RMB11,000/tonne in 1Q21. The cash and cash equivalents arrived at a record high of RMB1.02bn.

Meanwhile, the company proposed an interim dividend of 0.75 SG cents (A dividend yield of 7.7% as of the closing price of S$0.097).


DMF 5.22

2H22 outlook to remain stable. 

In the near term, China will continue to persist in its zero-covid policy which stifles economic growth. However, China started to carry out the counter-cycle monetary policies by lowering the loan prime rate and required rate of reserve in 1Q22.

Meanwhile, the National Development and Reform Commission is drafting a US$2.3tn infrastructure plan. Moving forward, the expansionary fiscal and monetary policies will uphold the rebound of the domestic economy in 2H22.


Technical TP of S$0.110; fundamental TP of S$0.245. 

While we have a Technical TP of S$0.110 based on short-term technical factors, we raised our fundamentals-based TP of S$0.245.

Our fundamental TP is based on the upbeat outlook of its earnings and the average of peers’ PE multiples.

Read the full results updates report here.


See also The Edge Singapore report: 
Jiutian to benefit from elevated prices, set to last till 2023: analysts


Share Prices

Counter NameLastChange
AEM Holdings3.730-
Avi-Tech Electronics0.275-
Best World1.780-0.010
Broadway Ind0.118-0.001
China Sunsine0.405-0.005
DISA0.003-
Food Empire0.6600.010
Fortress Minerals0.330-0.015
Geo Energy Res0.3650.010
Golden Energy0.775-
GSS Energy0.046-0.001
InnoTek0.470-0.005
ISDN Holdings0.400-0.005
ISOTeam0.1000.005
IX Biopharma0.1280.001
Jiutian Chemical0.075-0.001
KSH Holdings0.350-0.005
Leader Env0.0560.003
Medtecs Intl0.142-0.005
Meta Health0.0260.001
Nordic Group0.475-
Oxley Holdings0.1490.004
REX International0.230-0.005
Riverstone0.6300.005
Sinostar PEC0.190-0.001
Southern Alliance Mining0.380-0.025
Straco Corp.0.405-
Sunpower Group0.255-
The Trendlines0.094-
Totm Technologies0.105-0.005
UG Healthcare0.195-0.004
Uni-Asia Group0.805-0.010
Wilmar Intl4.1000.010
Yangzijiang Shipbldg1.4300.040

NextInsight RSS

rss_2 NextInsight - Latest News

Online Now

We have 1261 guests and no members online