\u3000\u3 Guocheng Mining Co.Ltd(000688) 556 Qingdao Gaoce Technology Co.Ltd(688556) )
High performance growth in 2021 and 2022q1
On April 28, the company released the annual report of 2021 and the first quarterly report of 2022: the operating revenue in 2021 was 1.567 billion yuan (year-on-year + 109.97%); The net profit attributable to the parent company was 173 million yuan (year-on-year + 193.38%);
2022q1: operating income of 556 million yuan (YoY + 103.06%, Mom – 6.36%); The net profit attributable to the parent company was 97 million yuan (YoY + 173.3%, mom + 58.3%).
The chip OEM accelerated the promotion and laid the foundation for the second take-off
Silicon wafer and cutting and processing services are the company’s new business layout and the basis for the company’s second take-off. With the production of Leshan 5GW project reaching capacity, the slicing business will realize operating revenue (106 million yuan) for the first time in 2021, with a slicing volume of 167 million pieces, equivalent to about 1.3gw, and a gross profit margin of 28.72%. The company recently announced the planning of Jianhu phase II 12gw project. After all projects are completed, the total slicing capacity reaches 47gw. With the ramp up of Leshan project and the production of other projects, the chip OEM business will usher in a large volume, and the gross profit margin is expected to be further improved.
Photovoltaic cutting equipment and diamond wire business continued to grow
Photovoltaic cutting equipment and diamond wire are the traditional strong businesses of the company. In 2021, the revenue was 980 million yuan and 292 million yuan respectively, with a year-on-year increase of 116.95% and 37.47% respectively. The company is the absolute leader of photovoltaic slicers, fully benefiting from downstream production expansion and large-scale upgrading, with sufficient orders on hand. At present, the technical transformation of “one machine and twelve lines” of diamond line has been successfully completed, with a total capacity of more than 25 million kilometers. The market share and gross profit margin are expected to rise in the future.
The volume of emerging businesses, the growth trend of the third curve is significant
The company’s semiconductor, sapphire, magnetic material cutting equipment and consumables are the company’s emerging businesses, with a revenue of 106 million yuan and a gross profit margin of 42.41% in 2021. With the gradual shift of relevant fields from mortar cutting to diamond wire cutting, semiconductor, sapphire, magnetic material cutting equipment and consumables, as the third growth curve of the company, have a significant growth trend.
Investment advice
The company has accumulated profound and competitive advantages in the field of cutting high hard and brittle materials, and fully benefited from the rapid development of photovoltaic and emerging industries. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 470 million yuan, 719 million yuan and 936 million yuan respectively, with a year-on-year increase of 172.2%, 53% and 30.1% respectively. At present, the corresponding PE of the stock price is 21, 14 and 11 times respectively, maintaining the “buy” rating.
Risk tips
The epidemic has delayed the progress of the project; Silicon wafer prices fell; Competition in the field of chip OEM has intensified.
