\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 330 Tdg Holding Co.Ltd(600330) )
Event: the company released its annual report for 2021 on the evening of March 21, 2021. During the reporting period, the company achieved an operating revenue of 4.085 billion yuan, a year-on-year increase of 29.44%; The net profit attributable to the shareholders of the listed company was 415 million yuan, a year-on-year increase of 8.87%, of which the net profit after deducting non recurring profits and losses was 292 million yuan, a year-on-year increase of 94.80%.
The revenue and profit of sapphire sector maintained double growth throughout the year, and the mini led led led the industry to continue to grow. In our comments on the semi annual report of the company in August last year, we mentioned that “sapphire sector is the most obvious segment of growth”. From the perspective of the whole year, this trend is still continuing. The company’s revenue of sapphire crystal materials reached 789 million in 2021, with a year-on-year increase of 123.74%, setting a new record of the company’s historical revenue, and the gross profit margin also increased by 6.07 percentage points year-on-year, which can be described as “double flying for profit”. The sapphire business has achieved historic success, which is clearly related to the significant recovery of the LED industry market. The cruel destocking cycle of downstream LED chip manufacturers has come to an end, and the rapid growth of mini led segment has driven the continuous improvement of the throughput of the sapphire industry. So far, global well-known brand manufacturers, including apple, Samsung, lejin, Lenovo, TCL, Xiaomi and Huawei, have published new application products such as miniled backlight TV, display and tablet computer, making the mini LED backlight application a rare bright new light in the difficult market of consumer electronics in 2021. Many research institutions regard 2021 as the first year of the formal commercialization of miniled backlight technology. Although miniled products as backlight have excellent advantages in brightness, contrast, color gamut, shape thickness, service life and power consumption, the high cost and low yield of products in high score areas are objective problems. In fact, the essential basis for solving these problems is large-scale. Therefore, the explosive growth of the industry driven by miniled has not really come, and there is still clear incremental space in the next few years. In recent years, the pattern of sapphire industry has further concentrated on top enterprises such as Tiantong, the decline of aoruide’s st and sapphire, and Russia’s mono are affected by the Russian Ukrainian war. These former competitors are no longer in the same dimension compared with Tiantong. Tiantong’s continuous growth will continue to be promoted by the steady expansion of production in the future.
The continuous expansion and investment of magnetic materials and piezoelectric crystals will further consolidate the industry position of Tiantong powder and crystal materials No.1 in China. Compared with sapphire, the performance of magnetic materials and piezoelectric crystals in 2021 is also commendable. The base of piezoelectric crystals is small, but the growth rate of operating revenue of 118 million is close to 200%. Although the growth rate of revenue of magnetic materials is only 33.7%, the base is high, which also sets a new high since the listing of the company. In the production expansion plan and non-public offering plan released earlier this month, the company has made it clear that it is willing to continue to invest heavily in production expansion. Benefiting from new energy applications such as power, energy storage and wind power, the downstream market space of magnetic materials has been completely different from that in the past decade; As the substrate material of SAW filter, piezoelectric crystal has been monopolized by overseas suppliers for many years. Tiantong has successfully broken this supply pattern and has realized reverse sales to overseas manufacturers such as Japan. Obviously, the three major products of the company in the two fields of powder and crystal materials have been the leaders in China, and the next production expansion plan will be an important support to firmly maintain this leading position.
The performance of equipment preparation 2021 is stable. If the CCZ long crystal furnace can be landed as scheduled, it will be the most core focus of 2022. Special equipment manufacturing has always been the core support of the company’s business revenue, and this year is no exception. In addition to the traditional crystal growth equipment and the corresponding cutting, grinding and polishing equipment, the CCZ long crystal equipment continuously promoted by the company in the past two years has made very clear breakthroughs and progress, and is still being tested and optimized since the second half of last year. Many cost reductions and efficiency gains in the photovoltaic industry since its development have come from the transformation and improvement of technologies in subdivided fields. CCZ (continuous Czochralski single crystal) continuously adds materials in the process of crystal drawing, which has higher crystal drawing efficiency, relatively low comprehensive power consumption, and has the advantage of uniform resistivity, which is conducive to the optimal conversion efficiency of cells. The company has very in-depth cooperation with poly GCL in this field. If mass production can be realized as scheduled this year, it will bring clear efficiency improvement and innovation to downstream customers and even the whole industry. At the same time, it will also bring rich returns to itself. The growth space for the company to successfully realize the industrialization and mass production of CCZ under the demand of cost reduction and efficiency increase in the photovoltaic industry is clear, and this will also be the core investment focus of the company throughout 2022.
Profit forecast and rating: maintain the buy rating. In 2021, the company handed over satisfactory growth answers. Sapphire, magnetic materials, piezoelectric crystals, including equipment manufacturing, all showed good growth performance, and the intuitive result was 94.8% deduction of non-profit growth. This data truly reflects that the company has entered the accelerated growth period of multi-point flowering in various business fields. We are optimistic about the cumulative growth brought by the company’s continuous leading position in the field of powder and crystal materials. At the same time, we are also optimistic about the breakthrough possibility of the company in the revolutionary innovation field of CCZ continuous long crystal equipment and other industries. It is predicted that the company will realize the net profit attributable to the parent company of 565 million, 724 million and 872 million from 2022 to 2024, and the current market value corresponds to pe2.0 million 87, 16.29 and 13.53 times, maintaining the buy rating.
Risk tips: 1) the recovery trend of LED industry is lower than expected, resulting in the growth of sapphire business of the company lower than expected; 2) The epidemic continues to affect the overall sales of global electronic products, and the company’s demand for magnetic, sapphire, piezoelectric crystal and other materials is curbed; 3) The pace of mass production of photovoltaic equipment such as CCZ of the company or the progress of importing important downstream customers is lower than expected.
