\u3000\u300 Ping An Bank Co.Ltd(000001) 2 Csg Holding Co.Ltd(000012) )
Event:
The company released its annual report for 2021, and achieved an operating revenue of 13.63 billion yuan, an increase of 27.7% at the same time; The net profit attributable to the parent company was 1.53 billion yuan, an increase of 96.2% at the same time; Deduct the net profit not attributable to the parent company of RMB 1.44 billion, an increase of 166.6% at the same time. In the fourth quarter alone, the company’s revenue was 3.38 billion yuan, an increase of 5.6% at the same time; The net profit attributable to the parent company was RMB 20 million, with a decrease of 62.9%; Deduct net profit not attributable to parent company – 30 million yuan. The company announced the profit distribution plan for 2021, and distributed a cash dividend of 2 yuan (including tax) for every 10 shares, with a cash dividend ratio of 40.16%.
Comments:
The high prosperity of float glass has helped the company’s performance rise. By the end of 2021, the company had 10 float glass production lines with an annual output of 2.47 million tons. Benefiting from the continuous rise of float glass prices in the first three quarters, the annual sector revenue increased by 47% and the net profit increased by 170%. Since 21q4, due to the shortage of funds in the real estate chain, the real demand for glass and market sentiment have cooled to a certain extent, and the price has also fallen from the high point of the cycle. As of December 31, 2021, the price of glass has dropped to 2087 yuan / ton, a decrease of 30% compared with the end of September. On the cost side, the prices of heavy soda ash and fuel continued to rise, and the profitability decreased significantly. In 2021q4, the national average price of heavy soda ash was 3391 yuan / ton, an increase of 72% and 98% year-on-year compared with the average price in the first three quarters of 21 years.
High aluminum electronic glass realizes “three-level jump” and can grow in the future. In 2021, kk6 electronic glass products of the company successfully opened China’s high-end customer market; The second generation upgraded product kk6-p of Xianning photoelectric high aluminum has been successfully industrialized, and the technical performance of the product, such as light transmittance, drop resistance and scratch resistance, has been further improved after strengthening; The third generation of high aluminum products have been verified. The ultra-thin electronic glass production line with a daily melting capacity of 110 tons invested and built by Hebei windows and the phase I upgrading and transformation project of Qingyuan south glass are being actively promoted. In the future, it will realize the comprehensive coverage of electronic glass products in various application scenarios from three generations of high aluminum to medium aluminum, sodium calcium and high, medium and low-end. In 2021, the company sold 273000 tons of electronic glass, an increase of 373.88% at the same time; The electric display sector achieved an operating revenue of 1.898 billion yuan, a year-on-year increase of 75%.
The profit of photovoltaic glass has declined temporarily, and the production capacity is still expanding rapidly. In 2021, the price of photovoltaic glass fell year-on-year due to the lower than expected growth of photovoltaic installed capacity and the continuous launch of new photovoltaic glass production capacity. The company’s photovoltaic glass business revenue was flat year-on-year, and the net profit decreased by 38%. By the end of 2021, the company has two photovoltaic calendered glass original production lines in Dongguan and Wujiang, with an annual production capacity of about 430000 tons. The company’s capacity under construction: four 1200t / D production lines in Fengyang, Anhui and one 1200t / D production line in Xianning, Hubei will be put into operation step by step from 2022q2. Proposed capacity: two 1200t / D production lines in Beihai, Guangxi. After all the above production lines are completed, the company’s photovoltaic glass production capacity will reach 9700t / D, which is expected to be among the first camp in the industry.
Leading engineering glass enterprises continue to make steady progress. The company’s engineering glass business mainly adopts the customized business strategy, and there is a certain time difference between the order and the actual production and delivery of products. In 2021, the price of H1 float original film rose rapidly and remained high, while the accelerated completion of downstream enterprises exacerbated the tension of product delivery, and the profit of engineering glass decreased significantly year-on-year. The original price of H2 float glass fell, the newly signed orders were started one after another, and the performance of engineering glass gradually returned to the normal level. The company sold 39.5 million square meters of engineering glass in the whole year, an increase of 14.8% and 24% respectively. With the gradual completion and launch of new production capacity, the company’s product service capacity and market share will continue to improve.
Cecep Solar Energy Co.Ltd(000591) business is refocused and light loaded. During the reporting period, the company made an impairment provision of about 700 million yuan for Cecep Solar Energy Co.Ltd(000591) related assets of Yichang CSG and Dongguan photovoltaic enterprises. At the same time, seize the favorable opportunity of insufficient structured supply of polysilicon in the industry, firmly promote the implementation of technical transformation and resumption of production of polysilicon production line, revitalize effective assets, and plan to appropriately strengthen the investment in photovoltaic power station projects. With the successful resumption of polycrystalline silicon production in the first quarter of 2022, the company’s current Cecep Solar Energy Co.Ltd(000591) business capacity is 10000 tons / year of high-purity polycrystalline silicon, 2.2gw/year of silicon wafer, 0.6gw/year of battery wafer and 0.6gw/year of module. It holds 132mw photovoltaic power station. In 2021, the company realized an operating revenue of 1.079 billion yuan, an increase of 9.1% at the same time.
The provision for impairment of large assets is withdrawn to disturb the performance in the short term. Q4 continue to accrue the provision for asset impairment as follows: 1. The provision for impairment of fixed assets and construction in progress is 176 million yuan, mainly for Qingyuan energy saving phase I electronic glass technical transformation project (some assets can not meet the needs of the project); 2. The provision for impairment of goodwill is 103 million yuan; 3. Provision for bad debts of 154 million yuan (mainly related to Evergrande and its subsidiaries); 4. The provision for inventory falling price is 4.44 million yuan. Since the company has accrued 672 million yuan of asset impairment reserves in the first three quarters of 2021, the total amount of the whole year reached 1.11 billion yuan. With the continuous large-scale provision of impairment losses, the company will unload its historical burden and move forward more steadily in the future.
Profit forecast, valuation and rating: the current loose policy direction of real estate is clear. Under the requirement of “guaranteed delivery”, the risk of uncompleted and delayed delivery is greatly reduced. We believe that when the epidemic situation is alleviated and the effectiveness of policy transmission is brought into play, the demand for glass will show strong toughness and elasticity. On the whole, the subsequent float glass industry is still expected to return to high prosperity. The company has become the leader of electronic cover glass in China. With the large volume of high-end products, there is still room for further improvement of profitability. In the future, the company’s photovoltaic glass production capacity will be expanded to 10000 tons (daily melting capacity), which is expected to gradually rank among the first echelon of the industry in the future.
In view of the current low prosperity of float glass and photovoltaic glass, we lowered the company’s EPS from 22 to 23 years to 0.91 yuan and 1.20 yuan (9% and 0.8% respectively compared with the last time), and gave the company’s EPS for 24 years to 1.41 yuan, maintaining the “buy” rating.
Risk warning: the recovery of float glass price is less than expected, the progress of product promotion and project construction is less than expected, and the risk of asset and credit impairment.
