\u3000\u3 Shengda Resources Co.Ltd(000603) 155 Xinyaqiang Silicon Chemistry Co.Ltd(603155) )
Events
On April 28, the company released the first quarterly report of 2022. In the first quarter of 2022, the company achieved an operating revenue of 329 million yuan, a year-on-year increase of + 70.25%, and the net profit attributable to the parent company was 96 million yuan, a year-on-year increase of + 35.39%. The performance was in line with expectations.
Business analysis
The volume and price of the company’s products have risen simultaneously. The company’s core products functional additives and phenylchlorosilane achieved sales of 707 tons and 3288 tons respectively; During the reporting period, the prices of the company’s functional additives and phenylchlorosilane products were 77600 yuan / ton and 57000 yuan / ton respectively, with a year-on-year increase of + 45.59% and + 26.67% respectively.
The sales volume of hexamethyldisilazane and vinyl double head increased, and the scope of application continued to expand. Hexamethyldisilazane is used as a stabilizer in lithium battery electrolyte, which can improve the electrochemical performance and cycle performance of lithium-ion battery, and its application in the field of new energy continues to expand. In addition, with the production and sales of electronic grade hexamethyldisilazane, the company’s profit structure will continue to be optimized. In terms of vinyl double head, vinyl double head is mainly used as head agent to produce high-temperature vulcanized silicone rubber, addition silicone rubber, silicone gel and vinyl silicone oil. The company expanded its production in 2021, with a current production capacity of 3700 tons, and the company’s sales volume continued to grow.
The production of phenylchlorosilane is expanded and extended to the downstream. In terms of phenylchlorosilane, the company’s phenylchlorosilane unit has undergone technical transformation, and the overall output has increased. In the long run, the company will further extend from phenylchlorosilane products to phenyl resin, phenyl silicone oil and phenyl silicone rubber. With the production of 20000 tons of phenylchlorosilane downstream products, the company’s industrial chain will be further extended, which is conducive to long-term growth.
Profit forecast and investment suggestions
Considering that the company’s products are in a high outlook as a whole, we revised the net profit attributable to the parent company from 2022 to 2024 to be RMB 464 million (+ 11.5%), RMB 580 million (+ 6.61%) and RMB 701 million (newly introduced) respectively; EPS is 2.98, 3.73 and 4.51 yuan respectively, and the current market value corresponding to PE is 16.4x, 13.1x and 10.84x respectively, maintaining the “buy” rating.
Risk tips
Production capacity construction progress is less than expected; Deterioration of product competition pattern; Product price fluctuation risk; Exchange rate fluctuation
