\u3000\u3 Guocheng Mining Co.Ltd(000688) 598 Kbc Corporation Ltd(688598) )
Event:
The company issued the reply announcement to the second round of examination and inquiry letter of 2021 annual report and application documents for issuing shares to specific objects.
Key investment points:
The growth of sales volume of hot field materials drives the high growth of the company’s performance. In 2021, the company achieved an operating revenue of 1.338 billion yuan, a year-on-year increase of 213.72%; The net profit attributable to shareholders of listed companies was 501 million yuan, a year-on-year increase of 197.25%. From the operating performance of the spin off company:
1) the substantial sales of hot field materials is the main factor for the improvement of performance: in 2021, the company’s IPO raised investment projects and over raised capital projects reached production capacity one after another, the convertible bond raised investment projects progressed smoothly, and the company’s production capacity increased significantly. At the same time, the prosperity of the photovoltaic industry is high, and downstream customers increase the procurement of the company’s products. In the whole year, the sales volume of the company’s advanced carbon matrix composites was 155299 tons, with a year-on-year increase of 246.36%.
2) the average sales unit price of hot field materials has declined. In 2021, the company’s average price of carbon matrix composites was 860200 yuan / ton, down 7.98% year-on-year, continuing the downward trend of average price for 18 years. The company adopts the method of appropriately reducing the selling price every year to improve the cost performance of carbon matrix composites, promote sales, improve the downstream market share, and at the same time, it is conducive to raising the profit threshold of the industry.
3) the unit cost has increased and the gross profit margin of thermal field materials has decreased. In 2021, the company’s carbon matrix composite cost per ton was 367700, with a year-on-year increase of 6.27%. The main raw material of the company is carbon fiber, which is mainly purchased from Zhongfu Shenying. The cost of the company is obviously affected by the rise of the overall price of carbon fiber. According to the information disclosed in the feedback draft of the company’s non-public offering of shares, the average cost of carbon fiber procurement of the company was 196600 yuan / ton in the first three quarters of 2021, up 14.28% year-on-year. The gross profit margin of the company’s thermal field system materials was 57.25%, a year-on-year decrease of 5.73 percentage points.
4) the stock incentive plan increases the period cost, but the period cost rate continues to decline. In 2021, the company’s sales expenses, management expenses, R & D expenses and financial expenses reached 61 million yuan, 71 million yuan, 65 million yuan and 08 million yuan respectively, with a year-on-year increase of 229.35%, 108.97%, 87.60% and positive year-on-year respectively. It is worth mentioning that due to the company’s implementation of the restricted stock incentive plan, the equity payment expenses apportioned among the sales expenses, management expenses and R & D expenses reached 7.8248 million yuan, 301494 million yuan and 188879 million yuan. The company’s expense rate during the period was 15.36%, a year-on-year decrease of 5.11 percentage points, reflecting a strong scale effect.
The non-public offering of shares will expand production capacity, and the medium-term market share is expected to continue to increase. The company plans to raise no more than 3102916300 yuan from non-public offering of shares. After deducting the issuance expenses, it is mainly used for the capacity expansion project of high-purity and large-size advanced carbon matrix composites, the construction project of Jinbo Research Institute and the project of replenishing working capital. Through the implementation of the raised investment project, the company can meet the production of large-size and n-type silicon wafer thermal field materials, meet the development trend of the industry, further increase the production capacity and improve the supply capacity. The company’s customers cover the mainstream suppliers of silicon wafer production, and have signed long-term cooperation agreements with Longi Green Energy Technology Co.Ltd(601012) , Jingke energy, Wuxi Shangji Automation Co.Ltd(603185) , Baotou Meike, Qinghai Gaojing, etc. According to the disclosure of the feedback draft, the company has signed a procurement framework agreement of 3900 tons and a total of 3.9 billion yuan with the above customers. This is conducive to ensuring the digestion of the company’s production capacity. Considering the production expansion progress and market demand of the same industry, the new production capacity of the company will increase the market share.
Build a carbon matrix composite platform company, and open up the growth space of the company for carbon ceramic materials and hydrogen storage business. The company develops new application fields of carbon based materials and establishes a subsidiary, Jinbo hydrogen energy, which is engaged in the preparation of high-purity hydrogen, the R & D, production and sales of carbon fiber resin based hydrogen storage bottles and carbon paper for hydrogen fuel cells; The company established Jinbo carbon ceramic, focusing on technology research and development, product preparation and market application in the field of carbon / ceramic composites. At present, the company has developed carbon fiber fully wound hydrogen cylinders, carbon paper for hydrogen fuel cells and carbon / ceramic composite brake discs for passenger cars. The company has the ability of carbon fiber weaving technology, chemical vapor deposition, carbonization, graphitization and other full set of carbon matrix composite preparation technology and key equipment. Therefore, the technical connectivity reduces the technical difficulty of the company to enter new fields, and the relevant business layout lays a sustainable growth potential.
Upgrade the company’s investment rating to “buy”. Without considering the dilution effect of non-public offering of shares for the time being, it is estimated that the fully diluted EPS in 2022 and 2023 will be 9.20 yuan and 11.37 yuan respectively. Calculated according to the closing price of 289.68 yuan / share on February 28, the corresponding PE will be 31.48 and 25.49 times respectively. As a leading enterprise in the field of carbon matrix composites in China, the company will fully benefit from the rapid expansion of downstream silicon wafer production enterprises and the development of new business in the future, and its profit is expected to continue to grow rapidly. The current valuation level is attractive and the company’s investment rating is upgraded to “buy”.
Risk tip: the industry’s production expansion speed is too fast, and the profitability of hot field materials is at risk of decline; Risk that the company’s production capacity construction progress is less than expected; The price of carbon fiber and other raw materials rises, and the cost is less than the expected risk.
