\u3000\u3 Shengda Resources Co.Ltd(000603) 185 Wuxi Shangji Automation Co.Ltd(603185) )
Q1 in 2022: performance increased by 106% year-on-year, greatly exceeding market expectations; The prosperity of silicon wafer industry is upward
1) results of the first quarterly report: the revenue was 5.7 billion, a year-on-year increase of 253%, and the net profit attributable to the parent company was 650 million, a year-on-year increase of 106%.
2) profitability: the comprehensive gross profit margin was 12.7%, with a year-on-year decline, mainly due to the rise of silicon wafer price and the sharp increase of revenue. We judge that the company’s single w profit is actually at a high level; The company’s net interest rate was 11.4%, maintaining a good level. The income from changes in fair value (83 million yuan) is mainly judged as the silicon material income from participating in 5% equity of Xinjiang GCL.
Since 2022, the price of silicon wafers has continued to rise, close to the new high in recent years. It is expected that the profitability of the company’s silicon wafers has rebounded significantly. We estimate that the single w profit of the current industry leading enterprise has rebounded to about 10 cents, and the industry boom is upward.
2021: the performance increased by 222% year-on-year and the production and sales were booming; It is estimated that the cost of non silicon is close to the industry leader
1) performance in 2021: the revenue was 10.9 billion, a year-on-year increase of 263%, and the net profit attributable to the parent company was 1.71 billion, a year-on-year increase of 222%. Compared with the performance express of 1.64 billion previously announced by the company, it has improved. Mainly due to the increase of income from changes in fair value (income from silicon material investment).
2) profitability: the comprehensive gross profit margin is 19.8% and the net profit margin is 15.7%. We estimate that the annual single w profit of the company in 2021 is about 8-9 cents on average, which is at the leading level in the industry. The company’s roe (diluted) in 2021 was 23%, which was at the leading level in the industry.
3) production and sales: in 2021, the company’s silicon wafer output reached 49400 tons. If calculated according to the silicon consumption of 0.28g/w, the corresponding annual shipment is about 18gw. The company’s production and sales capacity is close to 92.1% in 2021, while the company’s production and sales capacity is still close to 92.1% in 2021.
4) non silicon cost: in 2021, it accounted for 12.23% of the total cost, of which electricity charge accounted for 1.97% of the total cost, which has been at the leading level in the industry. We judge that the company’s non silicon cost is not much different from the industry leader, and the difference in profitability is more from the silicon material end.
“Silicon wafer + silicon material + industrial silicon” is an upward integrated scarce target, and strive to break through the areas with high investment barriers in the industrial chain
1) silicon material + industrial silicon (completely self built): 150000 tons of high-purity industrial silicon + 100000 tons of high-purity crystalline silicon project is proposed. The first phase of 80000 tons of industrial silicon + 50000 tons of polycrystalline silicon project (which can support about 18gw of monocrystalline silicon capacity) has been officially started and is expected to reach production in 2023.
2) granular silicon (share participation and 70% output locking): the company has increased its capital by 1.02 billion yuan and jointly invested in the project with an annual output of 100000 tons of granular silicon + 150000 tons of high-purity nano silicon, with a share participation of 27%. After putting into operation, the machine will obtain no less than 70% of granular silicon (corresponding to 70000 tons), meet the silicon material demand of 25gw silicon wafer, and strengthen the silicon material guarantee and silicon wafer competitiveness. The project is expected to be put into operation in the third quarter of 2022.
3) silicon material is a field with high investment barriers in the photovoltaic industry. The company’s entry into silicon material will help to ensure the supply of raw materials for the company’s silicon wafer, further improve the company’s industry comprehensive competitiveness and profitability, and solve the risk of profit fluctuation in a single link of silicon wafer.
Investment suggestions: high growth and low value; “Silicon wafer + silicon material + industrial silicon” integrated layout scarce target
It is estimated that the net profit from 2022 to 2024 will be 2.55/4/5.3 billion yuan, with a year-on-year increase of 49% / 59% / 31%; Considering 2.5 billion convertible bonds, the corresponding PE is 14 / 9 / 7 times, and the PE valuation is low in the industry. Maintain the “buy” rating.
Risk tip: the sharp expansion of production leads to the deterioration of the competition pattern, the price rise of silicon material affects the terminal demand, and the risk of technology iteration.
