\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 012 Longi Green Energy Technology Co.Ltd(601012) )
Conclusions and suggestions:
The company released its annual report for 2021, with a revenue of 80.932 billion yuan, yoy + 48.3%, and a net profit attributable to the parent company of 9.09 billion yuan, yoy + 6.2% (net profit after deduction of non-profit of 8.826 billion yuan, yoy + 8.4%), equivalent to EPS of 1.69 yuan. The company also announced the first quarterly report of 2022, with a revenue of 18.595 billion yuan, yoy + 17.3%, and a net profit attributable to the parent company of 2.66 billion yuan, yoy + 6.5% (after deducting non net profit of 2.65 billion yuan, yoy + 9.4%), equivalent to 0.49 yuan of EPS.
With the increase of downstream demand and the continuous expansion of the company’s production capacity, the shipment scale of the company’s components and silicon wafers is expected to increase rapidly. With the release of upstream silicon material capacity, the profitability of the company’s products is expected to improve. We expect the net profit of the company in 2022 and 2023 to be 13.22 billion yuan and 17.42 billion yuan respectively, with a year-on-year increase of 45.5% and 31.8%, and EPS to be 2.44 and 3.22 yuan respectively. The current share price corresponds to 25.1 and 19.1 times of PE in 22 and 23 years respectively. We give “buy” suggestions.
Subject to the rise in the price of raw materials, the growth rate of the company’s net profit in 21 years slowed down: the company released its annual report in 2021, realizing a revenue of 80.932 billion yuan, yoy + 48.3%, and a net profit attributable to the parent company of 9.09 billion yuan, yoy + 6.2% (net profit after deduction of non-profit of 8.826 billion yuan, yoy + 8.4%), equivalent to EPS of 1.69 yuan. The company’s performance is lower than expected. Quarter by quarter, the company’s Q4 achieved a revenue of 24.73 billion yuan, yoy + 19.2%, and a net profit of 1.53 billion yuan, yoy-30.3% (net profit of 1.427 billion yuan after deduction, yoy-32.97%), equivalent to EPS of 0.28 yuan.
In 2021, the company’s shipments of components and silicon wafers increased, of which the external shipments of components were 37.24gw, a year-on-year increase of 55.45%; The annual external sales of silicon wafer was 33.92gw, with a year-on-year increase of 6.5%. The company’s net profit growth rate was lower than the revenue growth rate, mainly because the upstream silicon material price continued to rise, and the company’s gross profit margin decreased by 4.4 percentage points year-on-year. In terms of expenses, the rate of administrative expenses decreased by 0.45 percentage points; The sales expense rate increased by 0.25 PCT year-on-year, mainly due to the increase in transportation costs affected by the epidemic; The financial expense rate increased by 0.43pct, mainly due to the increase of exchange loss.
The export of Q1 components is not as expected, but it is still expected to increase significantly throughout the year: the company also released the first quarterly report of 2022, realizing a revenue of 18.595 billion yuan, yoy + 17.3%, and a net profit attributable to the parent company of 2.66 billion yuan, yoy + 6.5% (net profit after deduction of 2.65 billion yuan, yoy + 9.4%), equivalent to 0.49 yuan of EPS. Q1’s component shipments were lower than expected. On the one hand, the products could not be delivered in time due to the U.S. Customs investigation; On the other hand, due to the current high price of raw materials, the company abandoned some orders with poor profitability. Throughout the year, the global demand for photovoltaic installation is still strong. The company expects that the annual module shipment will exceed 50gw, an increase of more than 30% over 21 years, and the profitability is expected to gradually improve under the background of silicon material expansion.
The company’s production capacity expanded rapidly and new technologies improved its product competitiveness: by the end of 2021, the company had 105gw, 60GW and 37gw of silicon chips, components and batteries respectively. As the upstream silicon material capacity gap is expected to be significantly improved this year, the company will accelerate the pace of capacity expansion this year. The company plans that by the end of 2022, the production capacity of monocrystalline silicon wafer, module and battery wafer will reach 150gw, 85gw and 60GW respectively, with a year-on-year increase of 50%, 42% and 62% respectively. Among the new capacity of battery chips, 15gw will adopt new technologies with higher efficiency. The production line is expected to be put into operation in Q3, and the competitiveness of the company’s products is expected to be further improved.
Profit expectation: we expect the net profit of the company in 2022 and 2023 to be 13.22 billion yuan and 17.42 billion yuan respectively, with a year-on-year increase of 45.5% and 31.8%, and EPS to be 2.44 and 3.22 yuan respectively. The current share price corresponding to PE in 22 and 23 years is 25.1 and 19.1 times respectively. We give “buy” suggestions.
