\u3000\u3 Guocheng Mining Co.Ltd(000688) 303 Xinjiang Daqo New Energy Co.Ltd(688303) )
Event: in 2022q1, the company achieved an operating revenue of 8.129 billion yuan, a year-on-year increase of 389.28% and a month on month increase of 221.66%; The net profit attributable to the parent company was 4.312 billion yuan, a year-on-year increase of 640.85% and a month on month increase of 244.77%. The gross profit margin in 2022q1 was 64.04%, with a year-on-year increase of 17.60pct and a month on month increase of 3.72pct; In 2022q1, the net interest rate attributable to the parent company was 53.05%, with a year-on-year increase of 18.01pct and a month on month increase of 3.56pct. The performance is in line with market expectations.
The sales volume of silicon materials increased rapidly, and the net profit per ton reached a new high: in 2022q1, the company’s silicon material output was 31400 tons, and the sales volume was 38800 tons, with a month on month ratio of + 81% / + 234%. The main reasons for the increase in sales volume were: ① the progress of 3B project exceeded the market expectation, and the increase in 2022q1 was significant; ② The inventory at the end of 2021 was transferred to 2022q1 sales, and the inventory has returned to normal at present. In 2022q1, the demand is strong, and the silicon material price remains high, at 208 yuan / kg (excluding tax), with a month on month ratio of + 170% / – 4%, corresponding to an income of 8.08 billion yuan, with a month on month ratio of + 388% / + 220%. At the same time, the cost has decreased, and the net profit per ton has reached a new high, at 111000 yuan / ton, with a month on month ratio of + 310% / + 17%. We expect that the company will have full production and sales in 2022q2, with sales volume of 3200034000 tons, an increase of 52-62% and a decrease of 10-18%; In 2022, the output will be 12000125000 tons, with a year-on-year increase of 39-44%. Considering the inventory transfer, we expect the sales volume to be 1 Qingdao Tgood Electric Co.Ltd(300001) 35000 tons, with a same increase of 73-79%. Assuming that the average price of silicon material including tax is 18 Shenzhen Cereals Holdings Co.Ltd(000019) 000 yuan / ton, the corresponding net profit per ton is about 85 C.Q.Pharmaceutical Holding Co.Ltd(000950) 00 yuan / ton.
The progress of phase III phase B project exceeded the market expectation, and the new project accelerated the expansion of production: the company’s phase III phase B project of 35000 tons was completed ahead of schedule in December 2021 and reached production in January 2022, and the climbing progress exceeded the market expectation. The company’s products are of high quality, with single crystal materials accounting for more than 97% of the existing production capacity, and has realized the batch sales of n-type high-purity silicon materials. We expect Baotou’s 100000 ton polysilicon & 1000 ton semiconductor project to be launched in March 2022 and completed in Q2 2023, continuously expanding production and strengthening its leading position.
Profit forecast and investment rating: Based on the tight balance of silicon material supply in 2022, we expect the silicon material price to remain high throughout the year, and we raise the company’s profit forecast. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 12.3/85/9.2 billion yuan (the previous value is 10.8/91/8.6 billion yuan), a year-on-year increase of + 114% / – 31% / + 7%. We give 10xpe in 2022 with a target price of 63.8 yuan, maintaining the “buy” rating.
Risk tips: intensified competition, unexpected changes in photovoltaic policies, etc
