\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 865 Flat Glass Group Co.Ltd(601865) )
Event:
The company issued its annual report for 2021.
Comments:
Production capacity increased significantly, and the annual performance basically met expectations. In 2021, the company achieved a total operating revenue of 8.713 billion yuan, a year-on-year increase of 39.18%; The net profit attributable to shareholders of listed companies was 2.12 billion yuan, a year-on-year increase of 30.15%; The net cash flow from operating activities was 580 million yuan, a year-on-year decrease of 65.92%; The weighted average return on net assets was 20%, down 9 percentage points year-on-year. The company’s performance growth mainly comes from the release of 5800 tons / day of new photovoltaic glass production capacity in Anhui phase II and Vietnam Haiphong.
According to the specific spin off data, in 2021, the company’s photovoltaic glass achieved an operating revenue of 7.122 billion yuan, a year-on-year increase of 36.28%, which is the core source of the company’s revenue and gross profit. The company produced 296 million square meters of photovoltaic glass in the whole year, with a year-on-year increase of 58.04%, which is related to the production capacity; The company sold 265 million square meters of photovoltaic glass, with a year-on-year increase of 43.17%; The inventory was 38 million square meters, a year-on-year increase of 508.81%. The substantial increase of the company’s inventory at the end of the year is mainly related to the high price of photovoltaic modules driven by costs in the fourth quarter, affecting downstream shipments.
The annual average sales price of photovoltaic glass was 26.90 yuan / m2, a year-on-year decrease of 4.81%, and showed a trend of high before and low after. In 2021, the production capacity of the photovoltaic glass industry was significantly released, the poor delivery of components affected the growth of demand, and the price of photovoltaic glass decreased significantly. On the other hand, the decline in the average price of photovoltaic glass of the company is related to the increase in the proportion of 2.0mm double-sided glass structure with low price. The average production cost of photovoltaic glass of the company was 17.30 yuan / m2, with a year-on-year increase of 20.98%. In 2021, the price of soda ash, quartz sand, fuel and freight rose and included in the operating cost, and the cost of photovoltaic glass of the company increased significantly. The company’s gross profit margin of photovoltaic glass was 35.70%, down 9.22 percentage points year-on-year.
The company has continued to expand advanced production capacity in the medium and long term, and its leading position in the industry has been continuously consolidated. In order to meet the market demand of photovoltaic glass and seize market share, photovoltaic glass enterprises have increased production capacity investment. The strategic development idea of the company is very clear, occupying the core advantageous location and continuously expanding the advanced production capacity. By the end of 2021, the company’s total capacity of photovoltaic glass was 12200 tons / day, an increase of 5800 tons / day compared with the end of the previous year. Meanwhile, the company expects to put into operation seven 1200 T / D photovoltaic glass kiln production lines in 2022; According to the plan, the company plans to put into operation eight 1200 T / D capacity in 2023. Therefore, it can be expected that by the end of 2022 and 2023, the company’s in transit capacity will reach 20600 tons / day and 30200 tons / day, showing a rapid growth trend. It is worth mentioning that the company has signed long orders with downstream customers such as Longi Green Energy Technology Co.Ltd(601012) , Jingke energy, Risen Energy Co.Ltd(300118) , Ja Solar Technology Co.Ltd(002459) . At present, the outstanding amount of long-term orders has reached 38.760 billion yuan. This will fully ensure the digestion of the company’s existing capacity and new capacity. The company continues to increase the investment in the production line of large kiln and furnace to meet the market demand for large-scale and double-sided power generation of photovoltaic modules, which is conducive to improving the market share of photovoltaic glass with the help of the cost advantage and differentiated product positioning of large kiln and furnace.
Acquisition of upstream quartzite resources to ensure stable supply of raw materials and reduce production costs. With the rapid development of photovoltaic industry, high-quality quartz sand has become a relatively scarce resource. According to the statistical data of Anhui Glass Industry Association, the average price of raw quartzite ore in 2019, 2020 and 2021 were 99.12, 141.59 and 176.99 yuan / ton respectively, with a year-on-year increase of 12%, 42.86% and 25%. The company used 3.65 billion yuan to acquire 100% equity of Dahua mining and 100% equity of Sanli mining held by fengsha group. At present, the company has completed the industrial and commercial registration procedures for equity changes, and the two mining companies have become wholly-owned subsidiaries of the company. The company has added 49.263 million tons of quartzite ore reserves, which effectively ensures the sand demand and quality safety of the production base, reduces the company’s dependence on external purchase of quartz sand, and effectively controls the impact of fluctuations in raw materials of quartz sand on product cost and performance.
Maintain the company’s “overweight” investment rating. It is estimated that the fully diluted EPS in 2022 and 2023 will be 1.29 yuan and 1.69 yuan respectively. Calculated according to the closing price of 47.73 yuan / share on March 23, the corresponding PE will be 37.10 and 28.31 times respectively. The valuation level of the company is higher than that of comparable companies in the same industry. As a leading enterprise in China’s photovoltaic glass industry, the company has significant advantages in manufacturing experience and cost. In 2022, the price of photovoltaic glass is at a low level, the supply of silicon will gradually increase, and the global demand for photovoltaic installation is expected to increase. In the medium and long term, the company continues to expand the production capacity of photovoltaic glass and increase the proportion of large-size and flaked photovoltaic glass, which is in line with the development trend of the industry in the future. Maintain the company’s “overweight” investment rating.
Risk tip: the global PV installation demand is less than expected; The expansion speed of photovoltaic glass is too fast, and there is a risk of declining profitability; Rising prices of raw materials, fuel and power; Capital expenditure increases, financial pressure increases risk.
