FCDW(605189) 长江证券·2024-07-16 14:44Financial Performance - The company expects mid-year profit for 2024 to be between 76 million and 91 million, representing an increase of approximately 76% to 111% compared to the previous quarter [1] - For the first half of the year, net profit is projected to be between 70 million and 76 million, showing a growth of over 70% [1] - The non-recurring net profit is estimated to be between 57 million and 68 million, also reflecting a growth of about 70% [1] - Sales volume reached 48,000 tons, but profits were below expectations [1] - The growth is attributed to increased production capacity and the scale effect after cost dilution [1] Business Line Performance - The company has maintained a production capacity utilization rate close to 90%, while small and medium-sized enterprises have an average utilization rate of about 50% [2] - The second quarter's gross margin data has not yet been released, but the gross profit mainly comes from sand mining operations [2] - The company has reduced processing fees for cotton yarn, with an average decrease of 700 yuan, which accounts for nearly 10% of total processing fees, leading to an improvement in gross margin [1][2] Market Data - The company has implemented hedging measures to mitigate the risk of price declines and will focus on releasing production capacity and reducing inventory [2] - The overall demand for the sock industry is stable, with online orders performing better than expected, while exports remain weak [6] Company Strategy and Industry Competition - The company plans to maintain production scale and adopt a zero-inventory management strategy, avoiding increased procurement [10] - The company has established a foundation in the sand market with stable orders, despite the small proportion of functional fabrics [2] - The company believes that its cost advantages are significant, and it has a good growth outlook, expecting higher revenue and profit contributions in the second half of the year [16] Management Comments on Operating Environment and Future Outlook - Despite unsatisfactory performance in the first half of the year, the company anticipates better results in the second half, especially during the traditional peak season from August to November [6] - The company expects to achieve a production target of 110,000 to 120,000 tons, representing a 30% growth, although it may struggle to meet the 80,000 tons target [6] - The overall gross margin and sales volume are at the bottom of the industry, but the company has sufficient production capacity reserves for future flexibility [21] Other Important Information - The company has a total raw material inventory of over 30,000 tons, with cotton accounting for 70% of this inventory [9] - Current cotton spot prices are around 15,000 yuan per ton, with futures prices at 14,600 yuan per ton [10][24] Q&A Session Summary Question: Are all three workshops in Jingzhou currently operational? - Currently, two of the three workshops in Jingzhou are operational, while the third workshop has not yet started [4] Question: What is the total production in Jingzhou for the first half of the year? - The total production in Jingzhou for the first half of the year is 21,000 tons [5] Question: What are the production and sales figures for Wuhu in the first half of the year? - Wuhu's production in the first half of the year was 36,000 tons, with sales close to 49,000 tons [13] Question: How is the company's hedging situation currently? - The company primarily executed long positions in Q1 but switched to short positions starting in April, with hedging volume reaching 70% of total inventory [17] Question: Will the company accumulate a large amount of inventory due to the expected decline in cotton prices? - The company will not accumulate a large amount of inventory, currently, the inventory cost is close to 30 to 40 million yuan [19]