\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 865 Flat Glass Group Co.Ltd(601865) )
Key investment points
In 2021, the company’s net profit attributable to the parent company was 2.12 billion yuan, with a year-on-year increase of 30.15%; the company released its annual report of 2021, and achieved an operating revenue of 8.713 billion yuan in 2021, with a year-on-year increase of 39.18%; The total profit was 2.38 billion yuan, a year-on-year increase of 27.02%; The net profit attributable to the parent company was 2.12 billion yuan, a year-on-year increase of 30.15%. In 2021q4, the operating revenue was 2.376 billion yuan, a year-on-year increase of 5.89% and a month on month increase of 2.89%; 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%. In 2021, the gross profit margin was 35.50%, a year-on-year decrease of 11.05 PCT, and in 2021q4, the gross profit margin was 17.91%, a year-on-year decrease of 40.60 PCT and a month on month decrease of 13.80 PCT; In 2021, the net interest rate attributable to the parent company was 24.33%, with a year-on-year decrease of 1.69pct; in 2021q4, the net interest rate attributable to the parent company was 16.96%, with a year-on-year decrease of 19.45pct and a month on month decrease of 2.77pct.
2021q4 profit is under pressure, and the profit can be repaired: according to the statement caliber (all converted to 3.2mm), the company’s output in 2021 was 296 million square meters, with an increase of 58%, and the sales volume was 265 million square meters, with an increase of 43%. If considering the 43% proportion of double glass in the whole year (tonnage caliber), we expect 320 million shipments to be 140 million square meters and 260 million shipments to 168 million square meters. Due to the rise in the prices of natural gas and soda ash from October 2021, the company raised the price. The average price of Q4 was 25-26 yuan / square, with a month on month ratio of – 41% / + 20%. Due to the de stocking of the component industry in Q4, the company’s glass inventory increased. As of December 31, 2021, the company’s inventory was 2.28 billion yuan, with a ring increase of 77.1%. There was strong demand in the downstream of Q1. We expect that the company’s inventory level has been restored to normal, superimposed with the company’s capacity climb, and we expect the Q1 shipment volume to increase significantly. The total profit of Zihua Mining Co., Ltd. / Daiwa Mining Co., Ltd. has been reduced by about 44 million tons after the acquisition of natural gas in April. At present, the profit of Zihua Mining Co., Ltd. / Daiwa Mining Co., Ltd. has been reduced by about 20 million tons.
Optimistic about the structural impact of follow-up double glass + large size α： 1) Increase in the proportion of double glass: as the glass price remains low, we expect that the proportion of double glass will increase to about 50% in 2022 (according to the tonnage caliber). The supply of 2.0 glass production capacity is limited, the production process is more difficult, and the gross profit margin is higher, which will improve the average profitability of the company; 2) Increase in the proportion of large size: from 2021 to now, large size accounts for 74% of the bidding projects, and the supply and demand of large size glass is relatively scarce. The company’s new production capacity can be large-size since 2020, with obvious differentiation in profits. At present, the premium of large-size glass is about 1 yuan / Ping.
Accelerate the expansion of production capacity and strengthen the leading position: at the end of 2021, the company’s production capacity is 12200 tons / day (including 600 tons / day in Jiaxing under cold repair). In 2022q1, the company will put into operation two 1200 tons / day kilns in Jiaxing, Zhejiang. In 2022q2-q4, five 1200 tons / day kilns in Fengyang, Anhui will be put into operation successively. In 2023, it is planned to continue to put into operation eight 1200 tons / day kilns. We expect the company’s production capacity to reach 20600 tons / day in 2022 and 30200 tons / day in 2023, The same increase was 69% / 47%.
Profit forecast and investment rating: Based on the fluctuation of glass price in 2021 and the recent large capital expenditure, we lowered the profit forecast for 20222024. We expect the net profit attributable to the parent company to be RMB 3.0/39.3/5.09 billion in 20222024 and RMB 3.01/4.01 billion before 20222023, with a year-on-year + 41.4% / + 31.1% / + 29.6%, maintaining the “buy” rating.
Risk tips: competition intensifies, policies are less than expected, etc.
