Key investment points
\u3000\u3 Guocheng Mining Co.Ltd(000688) 680 Shanghai Hiuv New Materials Co.Ltd(688680) )
In 2021, the net profit attributable to the parent company was 252 million yuan, with a year-on-year increase of 12.97%
In 2021, the company achieved a total operating revenue of 3.105 billion yuan, a year-on-year increase of 109.66%; The net profit attributable to the parent company was 252 million yuan, a year-on-year increase of 12.97%; Net profit deducted from non parent company was 244 million yuan, with a year-on-year increase of 13.20%. In 2022q1, the company achieved a total operating revenue of 1.228 billion yuan, a year-on-year increase of 118.87%; The net profit attributable to the parent company was 77 million yuan, a year-on-year increase of 2.55%. The company’s performance continued to grow significantly, mainly due to the expansion of the company’s photovoltaic film production capacity and the rise in the volume and price of film products.
The quantity and price of adhesive film products have increased, and the supporting adhesive films for large-size and n-type components have been developed.
In 2021, the company sold 246 million square meters of adhesive film, with a year-on-year increase of 51.26%; The gross profit margin was 14.92%, a year-on-year decrease of 8.96pc; The average selling price was 12.41 yuan / m2, a year-on-year increase of 38.11%. In 2021, the price of EVA particles, the raw material of adhesive film, rose sharply. The unit cost of the company’s adhesive film products was 10.56 yuan / m2, a year-on-year increase of 54.36%. With the gradual release of the production capacity of EVA particle manufacturers, the company’s film product profitability is expected to stabilize in 2022. In 2021, the company will focus on increasing R & D investment for large-size components, n-type battery supporting components, TOPCON and heterojunction module supporting adhesive films, and make technical reserves and industrialization preparations.
The production capacity of adhesive film expands rapidly, and the market share is expected to be further improved.
In 2021, the company’s Taizhou and Shangrao new 100 million square meters photovoltaic adhesive film projects were successfully implemented. In January 2022, the company plans to invest 200 million yuan in the production expansion project of Taizhou production base. After the project is completed, the annual production capacity of supporting 5-10gw photovoltaic modules will be formed. Meanwhile, the company plans to issue convertible bonds to raise 694 million yuan, of which 319 million yuan is used for Yancheng photovoltaic packaging film project with an annual output of 200 million square meters (phase I) and 255 million yuan is used for Shangrao photovoltaic packaging material project with an annual output of 150 million square meters (phase I). According to the company’s announcement, it is estimated that by 2025, the company will increase the film production capacity of about 665 million square meters for the raised investment projects of issuing convertible bonds, the proposed construction projects with self raised funds and the raised investment projects of IPO, and the overall production capacity is expected to reach 957 million square meters.
Profit forecast and valuation
The company is the leader of photovoltaic adhesive film, and the production capacity is released smoothly. We expect the net profit attributable to the parent company from 2022 to 2024 to be 546 million yuan, 802 million yuan and 996 million yuan respectively, with a year-on-year growth rate of 116.68%, 46.74% and 24.17% respectively, corresponding to EPS of 6.50, 9.54 and 11.85 yuan / share from 2022 to 2024, and corresponding PE of 22, 15 and 12 times respectively.
Risk warning: the global PV installation does not meet expectations; Rising prices of raw materials; The expansion of non photovoltaic business was less than expected.
