\u3000\u3 Guocheng Mining Co.Ltd(000688) 303 Xinjiang Daqo New Energy Co.Ltd(688303) )
In 2021, the net profit attributable to the parent company was 5.724 billion yuan, with a year-on-year increase of 448.56%.
In 2021, the company achieved an operating revenue of 10.832 billion yuan, a year-on-year increase of 132.23%; The net profit attributable to the parent company was 5.724 billion yuan, a year-on-year increase of 448.56%; The gross profit margin of sales is 65.65%. In 2022q1, the company achieved a total 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 of sales is 64.04%. The company’s performance continued to grow significantly, mainly due to the strong global demand for photovoltaic installation, the mismatch between the upstream and downstream production capacity of the industry, and the sharp rise in prices caused by the shortage of silicon supply.
Photovoltaic polysilicon continued to enjoy a high boom, and the construction of production capacity was smoothly promoted.
In 2021, the company achieved 86600 tons of polysilicon output, with a year-on-year increase of 12.03%, accounting for 17.75% of China’s polysilicon output. In 2022q1, the company produced 31000 tons of polysilicon and sold 39000 tons of polysilicon, with a year-on-year increase of 55.48% and 80.89% respectively. Due to the continuous shortage of silicon market supply, the unit price of polysilicon of 2022q1 company is 207.99 yuan / kg (excluding tax), with a year-on-year increase of 169.59%. The unit cost was 75.21 yuan / kg, with a year-on-year increase of 81.45%, mainly due to the increase in the purchase price of raw material industrial silicon powder. The company will continue to maintain full capacity production. It is estimated that the output of 22q2 will be 3200034000 tons and the annual output will be 12000125000 tons. In terms of production capacity, the company’s polysilicon phase III phase B project has reached production capacity in January 2022. At present, the designed annual production capacity has reached 105000 tons (the actual annual production capacity is about 125000 tons). The company’s Baotou 100000 ton high-purity polysilicon project was started in March 2022 and is expected to be completed in 2023q2.
Batch supply of n-type high-purity silicon material is realized, and capacity construction of semiconductor grade polysilicon is started.
The company continues to increase investment in single crystal materials and n-type silicon materials. In the future, the company will also increase R & D efforts on semiconductor grade polysilicon and further improve the company’s technical level to meet the demand for raw materials of n-type single crystal batteries and semiconductor industry. In 2021, the company’s R & D investment reached 375 million yuan, a year-on-year increase of 690.17%, accounting for 3.46% of the operating revenue. At present, the company’s monocrystalline silicon wafer material output accounts for more than 99%, and has realized the batch supply of n-type high-purity silicon material, which has been verified by many mainstream downstream enterprises. The 1000 ton polysilicon project of Baotou Semiconductor Co., Ltd. is expected to be completed in q23, 2023.
Profit forecast and valuation
The company is the leader of polysilicon in China, and the construction of production capacity is progressing smoothly. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 10.243 billion yuan, 10.326 billion yuan and 10.597 billion yuan respectively, with corresponding EPS of 5.32, 5.36 and 5.50 yuan / share and corresponding PE of 10.14, 10.06 and 9.80 times respectively.
Risk tip: the competition in silicon material industry is intensifying; The new installed capacity of photovoltaic was less than expected.