Flat Glass Group Co.Ltd(601865) (601865)
The company is one of the double oligarchs in the photovoltaic glass industry, with a stable position in the industry. It is planned to expand production in 2022, leading the industry. From the industry level, the policy vigorously promotes the projects in the whole county, the price of silicon wafer continues to decline, the demand for photovoltaic modules gradually recovers, the demand for double glass modules and large-size silicon wafer drives the rapid growth of photovoltaic glass, the price of photovoltaic glass is expected to hit the bottom and rebound, the overall prosperity of the industry is high, and the growth certainty is strong.
Three highlights of the company support the rapid growth of performance: 1) large scale and low-cost operation. The company mainly controls the procurement cost by purchasing raw materials on a large scale, improves the bargaining power, and arranges the production line close to the mining area to reduce the transportation cost; By expanding the production capacity and increasing the production line of large kilns, improve the yield and output efficiency of products, and effectively reduce the unit manufacturing cost; 2) Leading technology and continuous investment in R & D. In 2020, the R & D expenditure will be increased to RMB 285 million, and the R & D expenditure rate will be increased to 4.55%. At present, the photovoltaic glass production lines ignited and put into operation by the company are large kilns, and new production technologies are applied to enhance the scale effect and production efficiency of the company. 3) Bind downstream component manufacturers. The company has entered the list of qualified suppliers of large photovoltaic modules and has established long-term cooperative relations with Longi Green Energy Technology Co.Ltd(601012) , Jingke energy, Hanhua group, Risen Energy Co.Ltd(300118) and other enterprises. Three large orders were signed in 2021, with a total amount of RMB 25.227 billion.
Investment advice and profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 2.369 billion, RMB 3.256 billion and RMB 4.189 billion respectively, with a year-on-year increase of 45.46%, 37.42% and 28.66%, and EPS will be RMB 1.10, 1.52 and 1.95 respectively. Based on the closing price of RMB 57.94 on December 31, 2021, the corresponding PE will be 52.50, 38.20 and 29.69 times, giving the company the investment rating of “recommendation”.
Risk statement The company’s production expansion is less than expected, the photovoltaic installed capacity is less than expected, the price rise of raw materials is higher than expected, the price reduction of photovoltaic glass is higher than expected, the cost continues to rise, the company’s performance does not meet expectations, vicious market competition, systemic risks in the secondary market outside China, the risk of epidemic deterioration outside China is higher than expected, and the economic recovery outside China is lower than expected.
