\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 012 Longi Green Energy Technology Co.Ltd(601012) )
Performance review
On April 27, Longi Green Energy Technology Co.Ltd(601012) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the revenue was 80.9 billion yuan, an increase of 48% and the net profit was 9.086 billion yuan, an increase of 6%, in line with market expectations; In 2022q1, the revenue was 18.6 billion yuan, an increase of 17% and the net profit was 2.664 billion yuan, an increase of 6%, slightly exceeding the market expectation.
Business analysis
The overall operation maintained high-speed growth, ranking first in the global shipments of silicon wafers / components, and the operating cash flow was strong: the company successfully overcame multiple business challenges such as price fluctuations in the industrial chain, changes in product specifications, scarcity of logistics resources and adjustment of terminal demand structure in 2021, and achieved 70gw / 38.5gw of silicon wafers / components shipments, all of which continued to rank first in the industry, with component shipments increasing by 55% year-on-year, Significantly surpassing the growth rate of the industry, and achieving a comprehensive leading market share in major regions of the world, driving the company's annual revenue and net profit to a record high. At the same time, it is worth noting that the company's net operating cash flow reached 12.3 billion yuan in 2021, significantly exceeding the amount of net profit for the third consecutive year, showing strong hematopoietic capacity and high profit quality when the core business structure tends to be stable.
Exchange and fixed assets impairment / disposal losses mask the performance: the company's financial expenses in 2021q4 soared to RMB 590 million in a single quarter due to exchange losses. Meanwhile, the impairment and disposal losses of fixed assets in 2021 were RMB 870 million and RMB 350 million (mainly occurred in 2021q4), which significantly dragged down Q4 and the annual performance, but effectively maintained the company's equipment asset quality and future profitability at the leading level.
Q1's operating shortcomings are not hidden, and the probability of volume profit level increases quarter by quarter: due to international trade frictions, requirements for order profit and other factors, the company confirmed that the shipment volume of 2022q1 components is lower than the previously planned 6.4gw, but the gross profit margin of components reaches an ideal level of 19.3%. At the same time, the gross profit margin of 18gw silicon wafers is maintained at a relatively high level of 23%. It is estimated that the net profit of exported silicon wafers / integrated components is about 0.12/0.14 yuan / W respectively. The company's inventory and contract liabilities at the end of Q1 reached 21.6 billion yuan and 9 billion yuan respectively, and the revenue recognition of Q2 components is expected to speed up. At the same time, with the release of silicon supply and the company's 4 + 15gw new technology capacity put into operation from Q3, the product shipment and profit scale are likely to increase quarter by quarter.
With the long-term competitiveness of new technologies and differentiated products, the advantage of silicon wafer is expected to blossom again: we always believe that differentiation is the core element of competition in the future of component links. With the continuous large-scale, multi route and differentiated R & D investment layout, the company is expected to achieve accumulation and thin development in the tide of industrial technology iteration. At the same time, with the continuous development of battery technology and process towards the trend of high efficiency and precision, The continuous improvement of silicon wafer quality requirements is also expected to fully release the company's long-term technical advantages in the silicon wafer field.
Profit adjustment and investment suggestions
It is predicted that the company's net profit from 2022 to 2024 will be 15.5 billion yuan / 20.8 billion yuan, corresponding to eps2.5 billion yuan The current purchase price is 12.87 yuan, corresponding to the "12.4/21" PE price, and the "12.87/21" PE price is maintained.
Risk warning: international trade friction risk; Risk of irrational expansion of industrial capacity.
