\u3000\u3000 Yangling Metron New Material Co.Ltd(300861) (300861)
Events
On the evening of February 10, Yangling Metron New Material Co.Ltd(300861) announced that the company continued to carry out efficiency improvement and transformation on the basis of the original “single machine nine lines” production line, and successfully implemented the technical upgrading of “single machine twelve lines”, with the production efficiency increased by 33% compared with the original “single machine nine lines”. The company plans to fully complete the efficiency improvement and transformation of 578 production lines by the end of June 2022, with an annual production capacity of more than 23 million kilometers.
Key investment points
Photovoltaic diamond line leader, technical transformation to reduce single line cost
The company is a leading enterprise of photovoltaic diamond line, with a gross profit margin of 57% in the first three quarters of 2021, significantly higher than the level of the same industry. The technological transformation of “single machine and twelve lines” will reduce the labor cost and operation cost of the company’s unit line consumption. At the same time, the technological transformation will improve the use efficiency of emery. At present, the company’s emery accounts for 15% and the labor and manufacturing costs account for about 25%. According to our calculation, the gross profit margin is expected to increase by about 2% after the technological transformation.
The production capacity was further improved and the leading position was consolidated
At present, the company has a production capacity of 72 million kilometers. It was originally planned to expand production by 30 million kilometers in June, totaling 102 million kilometers. After this technical transformation, it is expected that the production capacity will reach 125 million kilometers in 2022. Considering that most of the new production capacity will appear in June 2022, it is estimated that the annual effective production capacity in 2022 will reach more than 90 million kilometers, further consolidating the leading position of the company in the industry.
Thin line will provide new industry alpha
Due to the high price of silicon material at present, the fine line of the industry is developing rapidly. At present, the diameter of mainstream products in the industry is 40 μ m-43 μ M, and gradually to 38 μ M penetration. As the diameter of diamond wire becomes finer, the smaller the diamond particles attached to its bus, the smaller its cutting capacity. Therefore, fine wire means more wire consumption. Taking M6 silicon wafer as an example, it is estimated that the line consumption of line 38 is nearly 50% higher than that of line 45. It is expected that the demand for diamond wire in the future is expected to further increase on the basis of the growth of photovoltaic installation.
Profit forecast
We are optimistic that the demand for photovoltaic installation will be gradually released during the decline of silicon material price, driving the rapid development of diamond line market. It is predicted that the company’s revenue from 2021 to 2023 will be 1.781 billion yuan, 2.809 billion yuan and 3.473 billion yuan respectively, and EPS will be 1.85, 2.70 and 3.24 yuan respectively. The current share price corresponds to 31, 21 and 18 times of PE respectively, giving it a “recommended” investment rating.
Risk tips
The photovoltaic installation did not meet the expectations, the expansion of diamond line did not meet the expectations, the price of diamond line fell, and the price of bulk commodities rose.
