\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 865 Flat Glass Group Co.Ltd(601865) )
Event: Flat Glass Group Co.Ltd(601865) issued the annual report for 2021.
The performance is in line with expectations and has significant profitability advantages. In 2021, the company achieved an operating revenue of 8.713 billion yuan, a year-on-year increase of 39.18%, a net profit attributable to the parent company of 2.120 billion yuan, a year-on-year increase of 30.15%, a gross profit margin of 35.50% (mainly due to the impact of freight included in operating costs, the gross profit margin decreased), and a net profit margin of 24.33%, leading the industry and maintaining a high level. In the fourth quarter alone, affected by the continuous launch of new production capacity in the industry and the lower than expected demand for downstream components, the price of photovoltaic glass remained low. The company achieved an operating revenue of 2.376 billion yuan in a single quarter, a net profit attributable to the parent of 403 million yuan, and the net interest rate still reached 16.96%. It was significantly different from the second and third tier manufacturers in terms of profitability, and the company had a significant cost leading advantage.
Accelerate the construction of production lines, form a production capacity of 20600t / D by the end of 2022, and consolidate the leading position. By the end of 2021, the total production capacity of the company had reached 12200t / D (including 2 1000t / D production capacity in Vietnam). According to Zhuo Chuang information statistics, the daily melting capacity of photovoltaic glass in China was 41260 tons by the end of 2021, and the company’s production capacity in China accounted for nearly 25%. Considering the higher production yield and operation rate of leading enterprises, the market share will reach a higher level. At present, the company’s capacity under construction includes Anhui production base phase III / IV Project (Fengyang), 750000 ton Cecep Solar Energy Co.Ltd(000591) equipment ultra-thin ultra-high transmittance panel manufacturing project (Jiaxing), with a total investment of 10.1 billion yuan and a total of 111200t / D production lines. It is expected to release 7 1200t / D production lines in 2022 and form a photovoltaic glass capacity of 20600t / D by the end of 2022. In addition, the company plans to build four 1200t / D production lines in phase I in Nantong. At present, the project is in the process of approval. After completion, it will plan to promote the construction of two 1200t / D production lines in phase II. After all the capacity planning of the company is implemented, it will form a capacity scale of 32600t / D, further expand the leading advantage and consolidate the leading position.
The acquisition cost of quartz resources is strengthened. The company has completed the acquisition of 100% equity of Anhui Dahua Dongfang mining and Anhui Sanli mining, with a total recoverable reserves of 43.86 million tons of quartz sand and a transaction consideration of 3.344 billion yuan. In recent years, with the tightening of environmental protection policies, the output of quartzite ore has decreased, but the downstream demand continues to expand, resulting in a sharp rise in the price of quartzite raw ore. according to the price description of low iron quartz raw ore from 2017 to 2021 issued by Anhui Glass Industry Association, the average price (tax included) of quartzite raw ore has increased from 95 yuan / ton in 2017 to 200 yuan / ton in 2021, cagr20 46%, considering that the current supply and demand situation has not changed, it is expected that the subsequent raw ore price of quartzite will remain high, and it is not ruled out that the price will rise further. According to the calculation of 500000 tons / 100 million square meters of 3.2mm glass quartz sand consumption, the exploitable amount can produce 8.8 billion square meters of photovoltaic glass, and the corresponding components are about 1800gw. At present, the company has completed the acquisition, which is expected to greatly improve the self supply rate of quartz sand and further reduce the cost.
Profit forecast: the company is expected to realize a net profit attributable to the parent company of RMB 3.251/4.155/4.756 billion from 2022 to 2024, corresponding to 30.6/24.0/20.9 times of the valuation, and maintain the “overweight” rating.
Risk tip: the new installed demand is less than expected, the size of ultra-thin glass further decreases, and the substitution effect of transparent backplane is enhanced, resulting in the deterioration of the supply and demand pattern of photovoltaic glass, intensified competition and pressure on profitability.
