\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 61 Yangling Metron New Material Co.Ltd(300861) )
Event: the company released its annual report for 2021, achieving a revenue of 1.848 billion yuan, a year-on-year increase of 53.3%, a net profit attributable to the parent of 763 million yuan, a year-on-year increase of 69.7%, a net profit of 683 million yuan after deducting non recurring profits and losses, a year-on-year increase of 66.4%, and a gross profit margin of 55%. In 2021q4, the operating revenue was 576 million yuan, a year-on-year increase of 72.6%, a month on month increase of 29.6%, the net profit attributable to the parent was 212 million yuan, a year-on-year increase of 69.7%, a month on month increase of 15.5%, and the net profit attributable to the parent after deduction was 192 million yuan, a year-on-year increase of 109.1% and a month on month increase of 9.6%.
Comments:
The production capacity of diamond line expanded rapidly and its profitability maintained a high level. The company achieved 454082 million kilometers of diamond line sales in 2021, with a year-on-year increase of 82.8%. By the end of 2021, the annual production capacity of diamond line had reached 70 million kilometers, and the production capacity layout and market share were in the leading position in the industry. The market price of diamond line has decreased steadily in 21 years. The average sales price of the company’s diamond line is 40.17 yuan / km, a year-on-year decrease of 15.68%, the operating revenue is 1.824 billion yuan, a year-on-year increase of 54.1%, and the sales gross profit margin is 57.3%, a year-on-year decrease of 1.46pct. In the past 21 years, the company has maintained a high profit level and strong profitability despite the decline of sales price: 1) the company has the advantage of large-scale, the fixed production cost has been diluted, and remarkable results have been achieved in reducing cost and increasing efficiency. 2) Taking advantage of its industrial chain advantages and technological innovation ability, the company has timely realized new product R & D and mass production and sales, and consolidated its leading market position. 3) The competition of new products is low and the price pressure is relatively small.
A number of intellectual property rights have been added, and the technology R & D and innovation ability has remained the industry leader. The company has independent intellectual property rights in the core technology, process control, equipment manufacturing and other links of electroplating diamond line production. In 2021, 16 authorized patents were obtained and 13 patents were accepted, which effectively protected the company’s technological achievements. In terms of equipment, in order to improve the production efficiency of diamond line equipment, rapidly expand production capacity and strengthen product competitiveness, 2022q1 company has successfully implemented the technical transformation of “single machine twelve lines” on the basis of the original “single machine nine lines” production line, with the production efficiency increased by 33% compared with the machine nine lines. It is expected to complete the efficiency improvement and transformation of all 578 production lines by the end of June 22, with the corresponding annual production capacity increased by more than 23 million kilometers. In terms of products, the company adheres to technological research and development, continuously extends the industrial chain to raw materials, and carries out research and development on the two raw material ends of cutting wire substrate and diamond micro powder; With the increase of market share of n-type silicon wafer and the increasing pursuit of cost reduction and efficiency, the company’s R & D team has increased the product line diameter from 45 around the demand for thin and large photovoltaic chips μ M is refined to 38 After several iterations μ m； At the same time, innovate the application of “flexible cutting” and “structural wire cutting” technology.
In depth cooperation with silicon wafer enterprises to gradually expand application fields. The company continues to maintain good cooperative relations with leading silicon chip enterprises such as Longi Green Energy Technology Co.Ltd(601012) , Jingke energy, Ja Solar Technology Co.Ltd(002459) , poly GCL and so on. The customer group has basically covered China’s major photovoltaic production enterprises, and is also actively exploring new silicon chip customers. The company customized products with higher matching degree for different customers, continuously adjusted and optimized the performance of diamond powder to meet customer needs, and the sales volume grew rapidly with the growth of customers. In other fields of hard and brittle materials, the company’s diamond line products have been gradually distributed in sapphire, precision ceramics, magnetic materials and other fields, which will form a new profit growth point of the company in the future.
Profit forecast and investment rating: we expect the company’s revenue from 2022 to 2024 to be RMB 2446 million, RMB 3149 million and RMB 4301 million respectively, with a year-on-year increase of 32.4%, 28.7% and 36.6%; The net profit attributable to the parent company was 1.003 billion yuan, 1.337 billion yuan and 1.789 billion yuan respectively, with a year-on-year increase of 31.4%, 33.3% and 33.8%. The current share prices of “20222022” and “20222022” were maintained at 12.85 times and 17.22 times respectively.
Risk factors: price decline risk of diamond line; Risk that the newly installed capacity of photovoltaic is less than expected; The company’s capacity expansion is less than the expected risk.
