\u3000\u3 Guocheng Mining Co.Ltd(000688) 303 Xinjiang Daqo New Energy Co.Ltd(688303) )
Event: Xinjiang Daqo New Energy Co.Ltd(688303) released the first quarter report of 2022.
The sales volume of silicon materials increased significantly, and the leading performance of silicon materials exceeded expectations. In the first quarter of 2022, the company realized an operating revenue of 8.129 billion yuan, a year-on-year increase of 389.28%, and a net profit attributable to the parent company of 4.312 billion yuan, a year-on-year increase of 640.85%. During the reporting period, the company’s polysilicon phase III phase B was successfully put into operation. In the first quarter, the polysilicon output was 31000 tons, with a year-on-year increase of about 55%. In terms of sales volume, considering that 2021q4 was affected by the strategy adjustment of downstream manufacturers, the company formed an inventory of about 12000 tons in a single quarter, driving the polysilicon sales volume to about 39000 tons in 2022q1, with a year-on-year increase of about 81%, and the profit per ton reached 111000 yuan.
The ramp up rhythm of production capacity is leading in the industry, and the leading position of technology is consolidated. The 35000 ton phase B project of phase III of the company was completed ahead of schedule in December 2021, and 1111 tons of silicon materials were produced in that month. The output was further increased to 2825 tons in January 2022, officially reaching the production capacity. The ramp up period of production capacity was only February, and the ramp up rhythm was ahead of the industry. From the perspective of the whole year, considering the impact of annual production line maintenance, it is expected that the annual polysilicon output will be 12 Csg Holding Co.Ltd(000012) 5000 tons in 2022, and the actual shipment scale is expected to exceed 130000 tons, with a year-on-year increase of more than 70%. In terms of product quality, in the first quarter of 2022, the materials for monocrystalline silicon wafers produced by the company accounted for more than 97%, and realized the batch sales of n-type high-purity silicon materials, which was at the leading level in the industry.
The supply at home and abroad is less than expected, resulting in the continuous tension of supply and demand pattern, and the price is expected to remain high throughout the year.
In China, since the fourth quarter of last year, nearly 200000 tons of new silicon material production capacity, including Tongwei, Daquan, GCL, ASI and Xinte, has been put into operation successively. However, due to the lower than expected release progress and capacity maintenance, the actual supply growth is lower than expected. According to the prediction of the silicon industry branch, China’s silicon material production in April is expected to be 54 Jiangling Motors Corporation Ltd(000550) 00 tons, which is basically the same as that in March.
Overseas, the output is affected by the maintenance and international situation. At the same time, the repeated epidemic has also increased the pressure on logistics and transportation, resulting in the import volume since the beginning of the year continues to be lower than expected. In the first quarter of 2022, the import volume of silicon material is 22000 tons, and the import volume in April is expected to be about 6 Jiangnan Mould & Plastic Technology Co.Ltd(000700) 0 tons, which is significantly lower than the import volume of 116000 tons in 2021 (10000 tons per month), resulting in the overall supply being lower than expected.
Overall, the total supply of silicon materials in April was about 6 Shenzhen Huaqiang Industry Co.Ltd(000062) 000 tons, which was basically the same as the silicon wafer output of 24-25gw according to the statistics of the silicon industry branch, and the supply remained tight. With the PV installed capacity gradually entering the peak season and the acceleration of the energy transformation process in Europe, it is expected that the downstream demand will increase rapidly. Throughout the year, the tight supply and demand pattern of silicon material link is difficult to change, and the price is expected to remain high.
Profit forecast: the company is expected to realize a net profit attributable to the parent company of RMB 11.742/11.926/14.901 billion from 2022 to 2024, corresponding to the valuation of 8.8/8.7/7.0 times, maintaining the rating of “overweight”.
Risk tip: the competition in silicon material industry is intensifying; The installed capacity of photovoltaic was less than expected.
