\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 865 Flat Glass Group Co.Ltd(601865) )
Performance review
On March 21, the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 8.713 billion yuan, a year-on-year increase of 39.18%, and the net profit attributable to the parent company was 2.12 billion yuan, a year-on-year increase of 30.15%. Q4 achieved an operating revenue of 2.376 billion yuan in a single quarter, an increase of 5.89% year-on-year and 2.89% month on month; The net profit attributable to the parent company was 403 million yuan, a year-on-year decrease of 50.67% and a month on month decrease of 11.57%.
Business analysis
Excellent cost management ability, and the gross profit margin was flat year-on-year under the pressure of price reduction. In 2021, the company sold 265 million square meters of photovoltaic glass, with a year-on-year increase of 43.17%; The gross profit margin was 35.7%, year-on-year -0.58pct. Excluding the impact of freight adjustment on cost, the gross profit margin was 39.5% ~ 39.7%, which was in line with expectations. Under the background of falling product prices and rising prices of raw materials and freight, the company has ensured the advantage of gross profit margin by controlling key raw materials such as quartz sand and continuously improving production efficiency.
The low operating rate in the downstream has led to the rise of inventory, and the inventory of 22q1 has decreased significantly. At the end of 2021, the inventory was 2.276 billion yuan, an increase of 990 million yuan compared with Q3, mainly due to the low operating rate of downstream components from November to December caused by the game of industrial chain, and the rise of the overall inventory of the industry affected the revenue recognition of Q4. Since the beginning of 2022, the production and sales dynamics of glass link have been good, the decline rate of inventory is significantly better than that in the same period, and the shipment of 22q1 is expected to increase month on month.
The scale of production expansion continues to take the lead, and the reserve projects ensure the leading advantage. The company’s production capacity is expected to reach 11600 tons / day by 2026, with a year-on-year increase of 11600 tons / day by 2026. In addition, the company has more than 12000 T / D reserve projects under construction / to be built in Fengyang and Nantong, which effectively ensures the leading scale advantage.
Under the pressure of dual control of energy consumption and profit, the supply and demand of photovoltaic glass in 2022 may be better than expected. Since the beginning of the year, the production and marketing dynamics of the glass sector have been good, but subject to the dual control of energy consumption in eastern provinces and the current relatively low average profitability of photovoltaic glass industry, the actual production capacity release progress is slightly slower than expected. At the same time, the hearing system officially launched this year may also bring some uncertainty to the subsequent production capacity release progress. Considering the marginal changes at both ends of supply and demand (the slicing process continues to advance), The annual price trend and profit performance of photovoltaic glass may be better than previously expected, and the leader is expected to fully benefit.
Profit adjustment and investment suggestions
According to our latest judgment on the price of photovoltaic glass in the next two years, fine tune the company’s net profit attributable to the parent company from 22 to 23 to 3.18 and 4.35 billion yuan. It is estimated that the net profit attributable to the parent company in 2024 will be 6.04 billion yuan, corresponding to EPS of 1.48, 2.03 and 2.81 yuan. The current a / H share price corresponds to 34 / 19 times PE in 2022, maintaining the “buy” rating of a / H shares.
Risk tip: the demand growth of photovoltaic glass is less than expected; The company’s production capacity construction progress is less than expected.
