\u3000\u3 Shengda Resources Co.Ltd(000603) 688 Jiangsu Pacific Quartz Co.Ltd(603688) )
Events
Jiangsu Pacific Quartz Co.Ltd(603688) released the annual report: in 2021, the company achieved an operating revenue of 960 million yuan, a year-on-year increase of 49%, and the net profit attributable to the parent company was 280 million yuan, a year-on-year increase of 49%.
Key investment points
The revenue of photovoltaic quartz sand increased significantly, driving the annual performance
The company’s Q4 revenue reached 280 million yuan, with a year-on-year increase of 60%, and the net profit attributable to the parent company reached 106 million yuan, with a year-on-year increase of 169% and a month-on-month increase of 68%. The gross profit margin in the single quarter of 2022q4 reached 47.9%, with a year-on-year increase of 11.28 percentage points, which was basically the same. The net profit margin in 2022q4 reached 37.57%, with a year-on-year increase of 15.22 percentage points and a month-on-month increase of 11.24 percentage points. On the one hand, the supply of quartz sand continued to fall short of demand, On the one hand, the cost of the company is properly controlled. According to the industry division, the company’s revenue from the photovoltaic industry reached 318 million yuan in 2022, with a year-on-year increase of 108%. According to the division of products, the company’s revenue from quartz sand reached 301 million yuan, a year-on-year increase of 111%, the company’s sales volume of quartz sand reached 23611 tons, a year-on-year increase of 48%, of which the export sales reached 14000 tons, a year-on-year increase of 93%, and the export proportion of quartz sand reached 60%, an increase of 14 percentage points compared with last year. The gross profit margin reached 56.69%, an increase of 9.55 percentage points year-on-year. The revenue of quartz sand business accounts for 31% of the company’s revenue, and the gross profit accounts for 39% of the company’s gross profit, which makes a significant contribution to the performance.
The demand of pure quartz company continues to expand, and the demand of pure quartz company is high
The substitution of n-type single crystal for polycrystalline has been basically completed. N-type high-efficiency single crystal has gradually become the next generation mainstream technology in the industry. In the downstream battery technology, the mass production conversion efficiency of TOPCON leading enterprises has reached 24.5%. It is expected that the efficiency is expected to be further improved with the maturity of the process. At present, TOPCON has reached the critical point of mass production, and the substitution of n-type high-efficiency single crystal for p-type single crystal is expected to continue. High purity quartz sand is the main raw material of the quartz crucible used in the production of monocrystalline silicon. The trend from p-type single crystal to n-type single crystal will require higher purity and quality of high-purity quartz glass materials, and the replacement frequency will be faster, further driving the demand for high-purity quartz sand. The company is one of the three enterprises in the world that master the technology of large-scale mass production of high-purity quartz sand. It is expected that high-purity quartz sand will be in short supply in the medium and long term in the future.
The 20000 t / a high-purity quartz sand phase II project will be fully completed in 2021 and is expected to contribute to the increment in 2022. The company has signed a framework agreement with the Management Committee of Jiangsu Ganyu Economic Development Zone to build a 15000 t high-purity quartz sand project with an investment of 330 million yuan and an estimated construction period of 18 months. The project is expected to be put into operation in 2023. The production of new production lines and the technical transformation of old production lines will drive the company’s production capacity to reach 60000 tons in 2023.
Continuously break through the international certification of semiconductor quartz products, and the market share of high-end quartz continues to expand
In 2021, the company’s revenue of quartz tube and rod products reached 625 million yuan, with a year-on-year increase of 28%, and the gross profit margin reached 41.31%, with a year-on-year increase of 2.71 percentage points. Through the continuous investment in the research and development of semiconductor quartz materials, the company’s products have been expanding in the application field of semiconductors. Among them, quartz tube, rod and ingot materials have successfully passed the semiconductor certification of Tokyo Electronics (TEL) diffusion link at the end of 2019 and the semiconductor certification of Tokyo Electronics (TEL) etching link in 2021; The independently developed quartz cylinder products were highly praised by the semiconductor market and passed the etching quartz certification of LAM in the United States in the second half of 2020. The 6000 T / a electronic quartz product project of the company is expected to reach production in October 2022. The 1800 T / a quartz mound project is progressing smoothly and has been completed and put into operation.
Quartz internal and external cavity products are also widely used in compound semiconductor industry. With the further expansion of the company’s market share of quartz materials in semiconductor industry, quartz materials for semiconductor industry will become an important performance growth point of the company in the future.
Profit forecast
It is predicted that the revenue of the company from 2022 to 2024 will be 1.53 billion yuan, 2.14 billion yuan and 2.81 billion yuan respectively, and the EPS will be 1.36, 2.05 and 2.77 yuan respectively. The corresponding PE of the current stock price will be 38, 25 and 18 times respectively. It will be covered for the first time and given a “recommended” investment rating.
Risk tips
Photovoltaic demand is less than expected; The production capacity launch progress is less than expected; Risk of large fluctuation of upstream raw material price; Risk of sharp decline in product price; Market systemic risk.
