\u3000\u3 Guocheng Mining Co.Ltd(000688) 303 Xinjiang Daqo New Energy Co.Ltd(688303) )
Event description:
The company released the first quarterly report of 2022. In 2022q1, the company realized an operating revenue of 8.129 billion yuan, a year-on-year increase of 389.28%; The net profit attributable to the parent company was 4.312 billion yuan, a year-on-year increase of 640.85%; The gross profit margin was 64.04%, up 17.60pct year-on-year, in line with market expectations.
Event comments:
The price of silicon material was at a high level, and the volume and profit increased simultaneously in the first quarter. Benefiting from the strong demand of the photovoltaic industry, 2022q1 company achieved 31000 tons of polycrystalline silicon output and 39000 tons of sales, with a year-on-year increase of 81.35%. At the end of the year, the inventory of the company was basically digested. At present, the inventory of the company has returned to the normal level. The unit selling price of silicon material of 2022q1 company was 208000 yuan / ton, with a year-on-year increase of 269.01%, and the unit cost was 75000 yuan / ton, with a year-on-year increase of 81.01%, mainly due to the sharp rise in the price of raw material industrial silicon powder. The company’s production capacity is mainly distributed in Xinjiang, Inner Mongolia and other places, with a relatively low electricity price level in the industry, and the single crystal / high-quality silicon material accounts for a relatively high proportion of the company’s products. Therefore, the price of silicon material is at a high level in the industry. It is expected that the price of industrial silicon powder will remain stable in the first half of the year, and the price of industrial silicon is expected to decline in the second half of the year with the production capacity, and the high gross profit level of the company is expected to continue to be maintained.
The production capacity continued to expand and the industry position was further consolidated. In January 2022, the company’s polycrystalline silicon phase III phase B project reached production, and the product quality met expectations. Single crystal materials accounted for 97% of the products of 2022q1 company, realizing the batch sales of n-type silicon materials. The output of the company is expected to be 3200034000 tons in the second quarter and 125000125000 tons in 2022. In the future, the company’s new capacity will continue to be put into operation. The 100000 ton high-purity crystalline silicon and 1000 ton semiconductor project in Baotou, Inner Mongolia, has been started in March 2022 and is expected to be completed in 2023q2. In addition, the company has planned to build its own industrial silicon capacity to ensure the supply of raw materials, and the new capacity will effectively maintain the company’s industrial competitive advantage.
Profit forecast, valuation analysis and investment suggestions: it is estimated that the company’s net profit attributable to the parent company from 2022 to 2024 will be 12.59178419738 billion yuan, with a year-on-year increase of 120.0% / – 37.7% / 24.2%, corresponding to EPS of 6.54/4.07/5.06 yuan and PE of 7.7/12.4/10.0 times. It will be rated as “Buy-A” for the first time.
Risk warning: price fluctuation risk of products and raw materials; Risk of changes in industrial policies; Demand fluctuation risk, etc.
