\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 865 Flat Glass Group Co.Ltd(601865) )
The company released its annual report for 2021, and its performance increased by 30% year-on-year. The leading position of the company’s photovoltaic glass is stable, and the continuous investment of new production capacity is expected to support the further upward market share; Maintain the overweight rating.
Key points supporting rating
Profit growth of 30% in 2021: the company released the annual report of 2021. The annual operating revenue was RMB 8.713 billion, with a year-on-year increase of 39.18%. The net profit attributable to shareholders of listed companies was RMB 2.120 billion, with a year-on-year increase of 30.15%. After deducting non-profit of RMB 2.055 billion, with a year-on-year increase of 26.92%. 2021q4 achieved a revenue of RMB 2.376 billion, a year-on-year increase of 5.89%, a month on month increase of 2.89%, and a profit of RMB 403 million, a year-on-year decrease of 50.67% and a month on month decrease of 11.57%. The company’s performance basically meets expectations.
The release of production capacity supported the rapid growth of photovoltaic glass sales: with the gradual release of the company’s new photovoltaic glass production capacity, the company’s photovoltaic glass shipments maintained a rapid growth, with an annual shipment of 265 million square meters, a year-on-year increase of 43.17%, and a revenue of 7.122 billion yuan, a year-on-year increase of 36.28%. In 2021, affected by the sharp rise in the price of silicon, the price of photovoltaic modules increased, which restrained the growth of photovoltaic terminal market to a certain extent. At the same time, the new capacity of photovoltaic glass industry was gradually released, resulting in the sharp decline in the price of photovoltaic glass after 2021q2. In 2021, the average after tax settlement price of the company was 26.90 yuan / m2, a year-on-year decrease of 4.81%. Affected by factors such as falling prices, rising freight prices and rising costs of some raw materials and fuels, the company’s gross profit margin decreased by 9.22 percentage points year-on-year to 35.70%.
Continuous expansion of high-quality production capacity: at present, phase III and phase IV projects of the company’s Anhui production base are under construction. At the same time, the company announced that it plans to invest about 6 billion yuan to build six photovoltaic module glass projects with a daily melting capacity of 1200 tons in Nantong, Jiangsu, and four photovoltaic module glass projects with a daily melting capacity of 1200 tons in phase I are in the process of approval. After the approval is completed, the company will speed up the construction. The continuous expansion of low-cost and high-quality production capacity is conducive to the company to seize the development opportunity of photovoltaic glass market and further improve the market share with the help of the cost advantage of large kiln furnace.
Valuation
Combined with the company’s annual report and the supply and demand of photovoltaic glass industry, we adjusted the company’s predicted earnings per share from 2022 to 2024 to 1.32/1.79/2.19 yuan (the original predicted earnings per share from 2022 to 2023 was 1.19/1.40 yuan), corresponding to a price earnings ratio of 35.1/25.9/21.1 times; Maintain the overweight rating.
Main risks of rating
Covid-19 epidemic impact exceeded expectations; The release of industrial capacity exceeded expectations; The permeability of double glass does not meet the expectation; Price fluctuation of raw materials and fuel power; Photovoltaic policy risk.
