\u3000\u3 Guocheng Mining Co.Ltd(000688) 106 Suzhou Jinhong Gas Co.Ltd(688106) )
Event: the company released its annual report for 2021, and achieved an operating revenue of 1.741 billion yuan in 2021, with a year-on-year increase of 40.06%; The net profit attributable to the shareholders of the listed company was 167 million yuan, a year-on-year decrease of 15.23%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 162 million yuan, a year-on-year decrease of 19.40%.
The rise in the price of raw materials affects short-term profits, and the performance guidelines for 2022 are optimistic: the company’s revenue in 2021 increased significantly year-on-year, mainly due to the increase in the company’s various business incomes, and the superposition of epitaxial mergers and acquisitions of 8 gas companies, of which mergers and acquisitions contributed 180 million yuan of operating income. The net profit attributable to the parent company in 2021 decreased year-on-year, mainly due to the decline of gross profit margin due to the rise in the price of upstream raw materials. From the perspective of revenue by products, the revenue of bulk gas, special gas and natural gas of the company was 699 million yuan, 659 million yuan and 233 million yuan respectively, with a year-on-year increase of + 44.97%, + 46.90% and + 65.00%, and the gross profit margin was 27.21%, 35.46% and 10.73% respectively, with a year-on-year decrease of 10.91 PCT, 2.72 PCT and 7.82 PCT respectively. The revenue of various products increased significantly, including a large decline in the gross profit margin of bulk gas and natural gas, and a small decline in the gross profit margin of special gas. From the perspective of Q4 single quarter, the operating revenue of Q4 single quarter was 507 million yuan, with a year-on-year increase of 11.43% and a month on month increase of 47.38%; The net profit attributable to the parent company was 41 million yuan, with a year-on-year increase of 5.13% and a month on month decrease of 25,45%. Q4 revenue continued to increase month on month, and the net profit attributable to the parent company decreased month on month. Looking forward to 2022, the company expects sales revenue of 2.7 billion yuan, a year-on-year increase of 55.06%; The net profit was 322 million yuan, a year-on-year increase of 93.16%, and the performance guidance in 2022 was optimistic.
Electronic bulk gas customers continued to make breakthroughs: on February 8, 2022, the company signed a gas supply contract with Guangdong core YUENENG with an amount of RMB 1 billion, mainly supplying electronic bulk gases such as nitrogen, oxygen, argon, helium, carbon dioxide and compressed air, with a contract term of 20 years. According to this calculation, the annual incremental income is about 50 million yuan. This time, following the signing of 1.2 billion semiconductor electronic bulk gas supply contract with northern integrated circuit in November 2021, the company has made another important breakthrough in semiconductor electronic bulk gas customers. The electronic bulk gas project has made major breakthroughs continuously, indicating that the company has opened up a new growth field of electronic bulk gas after the success of electronic special gas business.
Electronic gas is the core raw material for wafer manufacturing, which is expected to continue to benefit from domestic alternative demand: electronic gas is one of the core raw materials in wafer manufacturing process. According to semi data, it accounted for about 13% of wafer manufacturing materials in 2020, second only to silicon wafer, and the corresponding market size is about 4.5 billion US dollars. At present, the vast majority of the market is occupied by overseas leaders, such as air chemical, Linde Group, liquefied air and Solanic acid. Chinese manufacturers account for a relatively small proportion, and there is huge space for domestic substitution. With the high demand for downstream and the continuous high intensity of China’s wafer fabrication, China’s wafer production capacity has been increasing continuously in the world. According to IC Insights, the Chinese mainland’s wafer capacity is 3 million 180 thousand pieces per month (8 inches) as of December 2020, accounting for 15.3% of the world’s total, and the capacity to increase will reach 18% by 2025. With the continuous and rapid growth of China’s wafer production capacity and the superposition of domestic alternative demand, Chinese electronic gas manufacturers are expected to continue to benefit.
Investment suggestion: we estimate that the company’s revenue from 2022 to 2024 will be 2.616 billion yuan, 3.450 billion yuan and 4.353 billion yuan respectively, and the net profit attributable to the parent company will be 307 million yuan, 411 million yuan and 527 million yuan respectively, maintaining the “Buy-A” investment rating.
Risk warning: downstream demand attenuation risk, market competition intensification risk, raw material price rise risk
