\u3000\u3 Guocheng Mining Co.Ltd(000688) 556 Qingdao Gaoce Technology Co.Ltd(688556) )
Key investment points
Event: the company announced the sales contract of cutting equipment in 2022. Recently, the company signed a sales contract for silicon wafer cutting equipment with Jingke energy (Yushan) and Jingke energy (Poyang). The total contract amount is 140 million yuan, and the performance period is from May 2022 to August 2022.
The cutting equipment sales contract was signed again with the top5 component enterprise, and the leading silicon wafer cutting equipment is well deserved. At the beginning of this month, the company announced that it had signed a RMB 222 million cutting equipment sales contract with Qujing Jingao, and the delivery period was from March 2022 to June 2022. The company signed a 140 million yuan cutting equipment contract with Jingke Yushan and Jingke Poyang slicing projects, which will be delivered in batches before August 2022. According to the product delivery and revenue recognition cycle, the equipment contract of 362 million yuan signed this month is expected to fully recognize the sales revenue in 2022; Combined with the orders on hand at the end of the 21st century and the rapid development trend of innovative business, the company fully guaranteed the performance of high hard and brittle material cutting equipment during the year.
The downstream silicon wafer production continues to expand, and the scale of new production capacity is expected to exceed 2022. The demand for silicon wafer cutting equipment will continue to be high in 2023. According to the progress of silicon wafer capacity investment and construction and the capacity planning of new entrants, according to our incomplete statistics, the new capacity of slicing link is expected to exceed 130gw in 2023, which is still slightly higher than about 120gw in 2022, resulting in the continuous growth of the demand for silicon wafer cutting equipment. The company is the leader of photovoltaic cutting equipment in the industry. Its products cover the whole series of silicon wafer processing and cutting machines such as cutting machine, square cutting machine, grinding and inversion machine and slicer. Since 2021, its proportion in the cutting equipment of head customers has continued to increase, which will fully benefit from the expansion of downstream silicon wafer production. Considering the demand for equipment replacement and upgrading of the existing slicing capacity, we believe that the company’s photovoltaic cutting equipment is expected to continue the high prospect of 2021.
Slicing capacity was gradually released, new businesses developed steadily, and performance was gradually realized. Leshan silicon wafer manufacturing base cooperated with Tongwei Yongxiang and Meike in 2021 is now in full production. The production capacity of 12gw machining + 6Gw slicing project cooperated with Beijing Jingyuntong Technology Co.Ltd(601908) is steadily climbing. The slicing capacity of the company is expected to exceed 20GW in 2022. With the advantages of its own cutting equipment, diamond wire and cutting process, the company’s slicing business will enjoy the technical dividend of large-size slicing industry and fully release the flexibility of performance.
Profit forecast and investment suggestion: as the leader of cutting and consumables, the company has prominent advantages under the trend of large-size wafer. The company’s slicing performance has been gradually realized since 22 years. It is expected that the net profit attributable to the parent company in the next three years will be 112.19%, maintaining the “buy” rating.
Risk warning: the risk that the global PV installation demand is less than expected; The risk that the downstream silicon wafer expansion is less than expected; The risk of rising raw material costs and declining profitability of the company; Risk of policy change
