\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 876 Luoyang Glass Company Limited(600876) )
Luoyang Glass Company Limited(600876) : core of Kaisheng group's new energy materials sector
Luoyang Glass Company Limited(600876) , founded in 1994, listed on the Hong Kong Stock Exchange in 1994 and listed on the Shanghai Stock Exchange in 1995. The old float glass enterprise focuses on the photovoltaic glass business after reorganization. In 2020, the photovoltaic glass business accounted for 84% of the total revenue. The company is subordinate to Kaisheng group and is the core of the new energy materials sector of the group's "3 + 1" strategy.
Photovoltaic glass industry: cycle growth and attach importance to marginal change
Photovoltaic glass is the main auxiliary material of photovoltaic module, which provides high light transmittance and protection performance in the module. At present, ultra white calendered glass is the mainstream production process. We believe that the photovoltaic glass industry has strong cyclical attributes on the supply side and high growth on the demand side: (1) resume the cold repair of photovoltaic glass in recent five years. When the price of photovoltaic glass is low, the willingness of enterprises to cold repair is indeed enhanced. Production capacity policy plays an important role. In December 2020, the production capacity investment policy changed from "one size fits all" to appropriate easing. The core reason is the mismatch between supply and demand. After capacity replacement is no longer included, the production capacity of photovoltaic glass will be put into operation faster. (2) Demand side installed capacity growth + double glass penetration improvement, high growth of photovoltaic industry chain. During the 14th Five Year Plan period, the new installed capacity of photovoltaic maintains a high growth rate, while the cost of double glass modules decreases. CPIA expects the penetration rate to increase rapidly from 12% in 2018 to 60% in 2025. We estimate that the CAGR of photovoltaic glass market space (by weight) from 2020 to 2023 is 24.74%.
Capacity expansion and driving into the fast lane
After the restructuring in 2018, the focus was on the photovoltaic glass business, and the revenue and profit continued to improve. In the first three quarters of 2020 and 2021, the year-on-year growth rate of the company's revenue was + 64% and + 66% respectively, and the year-on-year net profit attributable to the parent company was + 506% and + 299% respectively. Photovoltaic glass is the core business of the company. From 2020 to 2021h1, the company's photoelectric glass business revenue was 2.56 billion yuan and 1.38 billion yuan respectively, accounting for 84% and 86.5% of the revenue. The core contribution of the company's profit also comes from the photovoltaic glass sector, that is, the three subsidiaries of Hefei new energy, Tongcheng new energy and Yixing new energy placed in the second restructuring in 2018.
Since 2021h2, the company has significantly accelerated its capacity planning through subsidiary expansion + extension M & A + absorption of the group's photovoltaic glass business. Assuming that the current planned production lines can be put into operation as scheduled, we expect to form a nominal capacity of 8180t / D by 2024, and the capacity CAGR from 2020 to 2024 will reach 52%. Under the homogenization of products, the cost control ability is the core competitiveness of photovoltaic enterprises. The scale of the company continues to expand and the cost optimization space is large.
The recent rise in the price of photovoltaic glass is mainly due to the rising cost + the recovery of downstream demand. At the beginning of March, the mainstream large single price of 3.2mm coated photovoltaic glass was 26 yuan / m2, up 4% month on month. In the medium and long term, the application of building renewable energy continues to penetrate, and photovoltaic glass directly benefits. The notice of the 14th five year plan for building energy conservation and green building development requires that by 2025, the renewable energy substitution rate of urban buildings will reach 8%, and the installed capacity of Cecep Solar Energy Co.Ltd(000591) photovoltaic of new buildings in China will be more than 50gw.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2021 to 2023 will be 419 million yuan, 537 million yuan and 844 million yuan respectively, and the corresponding dynamic PE of the stock price on March 21 will be 40x, 31x and 20x. The average PE of the three comparable companies in the photovoltaic glass industry in 2023 is about 18x, and the growth of the company is better. Considering the gradual prominence of the scale effect of the company, the expectation of the continuous growth of the company's performance and the current valuation of the company, the "recommended" rating is given for the first time.
Risk tip: the new production capacity of the industry is put into operation too fast; The installed capacity of photovoltaic is lower than expected; The production capacity is lower than expected; The price of raw materials fluctuated sharply.
