\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 865 Flat Glass Group Co.Ltd(601865) )
Event: the company released its annual report for 2021, and achieved an operating revenue of 8.713 billion yuan in 2021, with a year-on-year increase of 39.18%; The net profit attributable to the parent company was 2.12 billion yuan, a year-on-year increase of 30.15%.
Under the background of capacity expansion, the sales volume of photovoltaic glass increased rapidly. After the improvement of supply and demand situation, the price of photovoltaic glass decreased, but the profitability of the company maintained the leading position in the industry. Photovoltaic glass sector: in terms of sales volume, the company’s four photovoltaic glass production lines with a daily melting capacity of 1200 tons in Anhui phase II were successfully put into operation. In 2021, the company’s photovoltaic glass sales increased by 43.17% year-on-year to 265 million square meters; In terms of price, the supply and demand situation of photovoltaic glass has significantly improved with the production of several production lines in the industry. The price of photovoltaic glass has fallen since March 2021. The low point of price (tax included) in the year has reached 22 yuan / Ping (the high point at the end of 2020 is 45 yuan / Ping). The ASP (tax excluded) of the company decreased by 4.81% to 26.90 yuan / square meter in 2021. Overall, in 2021, the company’s photovoltaic glass sales revenue increased by 36.28% year-on-year to 7.122 billion yuan, while the gross profit margin decreased by 9.22 PCT to 35.70% (excluding the impact of freight adjustment), which is still at the leading level in the industry.
In addition, in 2021, the operating revenue of engineering glass sector increased by + 34.07% to 711 million yuan year-on-year, and the gross profit margin increased by 6.35 PCT to 33.02% year-on-year; The operating revenue of household glass sector increased by + 16.60% to 381 million yuan year-on-year, and the gross profit margin increased by 6.46 PCT to 30.72% year-on-year; The operating revenue of float glass sector increased by + 420.18% to 394 million yuan year-on-year, and the gross profit margin increased by 7.03 PCT to 38.84% year-on-year.
The company grasps the leading advantages, further increases the capacity expansion, and ensures the profitability of the company with the advantages of cost and technology. Under the guarantee of multiple advantages such as cost, raw materials and scale, the company will further strengthen the capacity expansion. After announcing the investment plan of six photovoltaic glass projects with a daily melting capacity of 1200 tons in the new phase I of Nantong, it is expected that the company will have a capacity of 8400 / 9600 / 2400 tons / day in 22-24 years. By the end of 22-24, the company’s photovoltaic glass design capacity is expected to reach 206 / 3.0232600 tons / day respectively, and the scale advantage will be further expanded. In addition, the continuous operation of the company’s large kiln will effectively reduce the unit cost of the company. At the same time, the upstream quartz sand resources will be distributed through the acquisition of the equity of Sanli mining and Dahua mining, and the supply and demand situation of 2.0mm wide glass in 2022 will remain relatively tight in some quarters, and the price is expected to remain high. We are optimistic about the maintenance of the company’s profitability.
Maintain the “buy” rating: according to the company’s new capacity expansion plan and the judgment on the price increase caused by the phased shortage of supply and demand of 2.0mm wide glass in 2022, we raised the profit forecast for 22 / 23 years and added the profit forecast for 24 years. It is expected that the company will realize the net profit attributable to the parent company of RMB 3.06539844889 billion in 22-24 years (6% / 22% / new), corresponding to eps1.5 billion 43 / 1.86/2.28 yuan. The current share price corresponds to 35 / 27 / 22 times of PE in 22-24 years. As an industry leader, the company’s continuous expansion of production will ensure the rapid growth of shipments, and the advantages of cost control and large-size glass manufacturing will also ensure that the company will maintain good profitability and maintain the “buy” rating under the background of the downward price of photovoltaic glass.
Risk warning: the installed capacity of photovoltaic is less than expected; Environmental pollution risk during glass production; Trade dispute risk; Price fluctuation risk of raw materials, fuel and power, etc.
