\u3000\u3000 Wuxi Shangji Automation Co.Ltd(603185) (603185)
Announcement of 2021 performance express: a year-on-year increase of 208%; We expect 2021q4 to be a phased performance low
1) operating revenue: 10.9 billion yuan in 2021, an increase of 262% year-on-year. In Q4 of 2021 alone, the revenue was 3.32 billion yuan, with a year-on-year increase of 212% and a month on month decrease of 17%. The company’s capacity utilization rate and production and marketing rate remain at a high level.
2) net profit attributable to parent company: 1.64 billion yuan in 2021, with a year-on-year increase of 208%. In Q4 of 2021 alone, the net profit attributable to the parent company was 230 million yuan, an increase of 23% year-on-year and a decrease of 58% month on month.
3) net profit attributable to the parent company after deduction of Non Profits: it is expected to be 1.47 billion yuan in 2021, with a year-on-year increase of 187%. Among them, the non recurring profit and loss is 165 million yuan, which is mainly judged as the investment income of 5% silicon material of Xinjiang GCL.
4) profitability: in 2021, the company’s net interest rate was 15% for the whole year and 7% for Q4 alone.
5) total assets: 14.3 billion yuan in 2021, with a year-on-year increase of 191%. At present, the company’s monocrystalline silicon production capacity reaches 30GW. It is not ruled out to further expand production in 2022. It is expected that the shipment volume is expected to more than double in 2022.
At present, the company’s silicon wafer business is slightly single, and the photovoltaic industry is ten times larger than the track in the past ten years. We don’t think we can rule out cultivating new growth points
1) 2021q4 performance is lower than expected. We estimate that when the price of Q4 silicon material is high, the company maintains a relatively high operating rate in the industry (to expand market share), resulting in a decline in profitability. As the prices of silicon materials and wafers stabilize, we expect 2021q4 to be the low point of the company’s phased profit, and 2022q1 is expected to rebound.
2) at present, the company’s silicon wafer business is slightly single. When the industry fluctuates violently, the anti risk ability needs to be further improved. We believe that the company’s granular silicon project is an attempt to extend the industrial chain. The photovoltaic track will be ten times larger in the next ten years. The company does not rule out the possibility of further extending the industrial chain. Previously, the company has announced that it plans to expand its business scope to electronic special materials, semiconductor equipment, etc.
Granular silicon project: strengthen the competitiveness of silicon wafers and bring profit growth points; Recently, the granular silicon project has been recognized by the new capital
1) the company has increased its capital by 1.02 billion yuan and jointly invested in the project with an annual output of 100000 tons of granular silicon + 150000 tons of high-purity nano silicon. At present, Jiangsu Zhongneng, Wuxi Shangji Automation Co.Ltd(603185) , Gaojia Cecep Solar Energy Co.Ltd(000591) and Tibet Ruihua hold 55%, 27%, 2.6% and 15.4% shares of Inner Mongolia Xinyuan respectively (the total investment of the project is expected to be 8.9 billion yuan). After putting into operation, the machine will obtain no less than 70% of granular silicon (corresponding to 70000 tons), which can meet the silicon material demand of 25gw silicon wafer in the future, and strengthen the silicon material support ability and the core competitiveness of silicon wafer.
2) the granular silicon + nano silicon project is expected to be put into operation in the third quarter of 2022, bringing new major profit growth points. We expect to bring new profit growth points to the company’s performance in 2022 and 2023. The price of silicon powder is expected to be RMB 18.55 million / ton, which is expected to bring an income of nearly RMB 20.25 million / ton of silicon powder.
Investment suggestions: high growth and low value; It will play an important strategic role in the large silicon wafer and granular silicon industry in the future
Considering 2.5 billion convertible bonds, the net profit from 2021 to 2023 is expected to be 1.64/25/4 billion yuan, with a year-on-year increase of 208% / 54% / 60%, and PE is 23 / 15 / 9 times. PE valuation is low in the industry. Maintain the “buy” rating.
Risk tip: the sharp expansion of production leads to the deterioration of the competition pattern, the price rise of silicon material affects the terminal demand, and the risk of technology iteration.
