\u3000\u3 Guocheng Mining Co.Ltd(000688) 556 Qingdao Gaoce Technology Co.Ltd(688556) )
The performance of the annual report and the first quarter report increased rapidly, the ability to control expenses was strengthened, and the profitability was further optimized
On the evening of April 28, 2022, the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 1.567 billion yuan, a year-on-year increase of + 109.97%; The net profit attributable to the parent company was 173 million yuan, a year-on-year increase of + 193.38%; Deduct the net profit not attributable to the parent company of 173 million yuan, a year-on-year increase of + 302.87%; The gross profit margin was 33.75%, year-on-year -1.6pct; The net interest rate was 11.02%, year-on-year + 3.13pct; During the period, the expense rate was 20.29%, year-on-year -7.55 PCT, of which the R & D expense rate was 7.48%, year-on-year -4.04 PCT, the management expense rate was -1.42 PCT and the sales expense rate was -1.25 PCT; ROE14. 96%, yoy + 8.98pct; The net operating cash flow was 76 million yuan, a year-on-year increase of + 1903%. Looking at 2021q4 alone, the company’s revenue was 594 million yuan, a year-on-year increase of + 148.26%; The net profit attributable to the parent company was 61 million yuan, a year-on-year increase of + 228.22%; Gross profit margin 34.70%, year-on-year + 4.30pct; The net interest rate was 10.30%, with a year-on-year increase of + 3.10pct.
In 2021, the company’s performance maintained rapid growth and the gross profit margin decreased slightly, mainly due to the fact that the gross profit margin of photovoltaic cutting equipment, which accounts for 63% of the company’s revenue, was 31.11% in the current period, with a year-on-year increase of -5.15pct. In 2021, the unit income of photovoltaic cutting equipment was 960000 yuan, with a year-on-year increase of -9.27%, while the unit cost was -1.93%, which may indicate the increase of market competition in this field. However, the company sold 1021 photovoltaic cutting equipment, with a year-on-year increase of + 139, The company’s wire cutting equipment has a leading market competitive advantage and occupies most of the market share of slicers in the photovoltaic industry during the reporting period. During the current period, the company’s expense rate decreased significantly. At the end of 2021, the company had 1979 employees, compared with 1165 in the previous year. In the case of significant expansion of the staff scale, the expense rate did not rise but fell, which reflects the company’s strong expense management ability, and also shows that the efficiency of the company’s personnel has improved and the per capita income has increased.
On the same day, the company released the first quarter report of 2022. In 2022q1, the revenue was 556 million yuan, a year-on-year increase of + 103%; The net profit attributable to the parent company was 97 million yuan, a year-on-year increase of + 173%; The gross profit margin was 37.66%, with a year-on-year increase of + 4.39 PCT; The net interest rate was 17.41%, with a year-on-year increase of + 4.47pct; The expense rate during the period was 16.85%, with a year-on-year increase of -4.56pct. The company’s expense control ability was further improved, and the quality of profits was rapidly improved.
Silicon wafers and cutting and processing services are initially reported, and the expansion of OEM capacity is accelerated
The company announced the business of “silicon wafer and cutting and processing services” in its 2021 annual report. The current revenue is 106 million yuan, the gross profit is 30 million yuan, the gross profit margin is 28.72%, the output is 179926400 pieces, the sales volume is 167485800 pieces, and the production and marketing rate reaches 93.09%. Assuming that the sales volume is all large-size silicon wafers (182 ~ 210), we calculate that the gross profit of the company’s single GW silicon wafers and cutting and processing services is about 18 million ~ 24 million.
On the same day, the company issued the “announcement on investment and construction of Jianhu (phase II) 12gw photovoltaic large silicon wafer project”, with an estimated investment of 631 million yuan. Previously, the scale of phase II planned by the company was 10GW. The scale expansion may indicate the shortage of OEM capacity. The construction cycle of the project is 12 months. It is planned to start production in 2023. So far, the total OEM capacity of the company is expected to reach 47gw.
The photovoltaic boom may continue, and the horizontal expansion of the emerging cutting field of high hard and brittle materials is expected to bring new growth
The global development of renewable energy, including photovoltaic, has become a global consensus. CPIA predicts that the average annual new installed capacity of global photovoltaic will reach 232286gw from 2022 to 2025. The continuous prosperity of photovoltaic market is expected to bring sustained performance growth to the company.
While focusing on the photovoltaic field, the company will give full play to the advantages of joint research and development, collaborative sales and integrated development of “cutting equipment + cutting consumables + cutting technology”, and actively expand to the cutting scenes of semiconductors, sapphires, magnetic materials and other high hard and brittle materials. In 2021, the revenue in this field was 105 million yuan, a year-on-year increase of + 323.05%, achieving an order of magnitude growth, with a gross profit margin of 42.41%, higher than the sales gross profit margin (33.75%).
In 2021, global silicon wafer shipments reached 14.165 billion square inches, a year-on-year increase of + 14.17%, a record high. Global sales of semiconductor manufacturing equipment reached 102.6 billion US dollars, a year-on-year increase of + 44%; Semiconductor equipment sales in Chinese Mainland reached US $29.6 billion, a year-on-year increase of +58%. However, the self-sufficiency rate of semiconductor equipment in China is low, and the localization and substitution of semiconductor equipment contains huge market space. As a typical representative of the third generation of semiconductor materials, silicon carbide is driven by the application of new energy vehicles and industrial power supply. The market scale of silicon carbide power devices is expected to reach US $2.56 billion in 2025 and that of substrate materials is expected to reach US $1.1 billion in 2024. In 2025, the global demand for sapphire substrates is expected to reach 250 million pieces (converted into 2 inches). With the continuous promotion of innovative business, new fields are expected to bring new growth to the company.
Investment advice
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 460 million yuan, 627 million yuan and 747 million yuan respectively, corresponding to the current PE of 22x / 16x / 13X respectively, which will continue to be recommended.
Risk tips
Macroeconomic downturn and market demand decline; The price of raw materials fluctuates sharply; Risk of policy changes in the photovoltaic industry.
