\u3000\u3 China Vanke Co.Ltd(000002) 623 Changzhou Almaden Co.Ltd(002623) )
Event: Changzhou Almaden Co.Ltd(002623) released the annual report of 2021 and the report of the first quarter of 2022.
Glass prices remain low and the company’s performance is under pressure. In 2021, the company achieved an operating revenue of 2.032 billion yuan, a year-on-year increase of 12.71%, and a net profit attributable to the parent company of 54 million yuan, a year-on-year decrease of 60.80%. The company’s main business, photovoltaic glass, achieved sales of 72 million square meters throughout the year, with a year-on-year increase of 36.63%, and achieved sales revenue of 1.743 billion yuan, with a year-on-year increase of 15.41%. In terms of profit, due to the sharp year-on-year decline in glass prices and the low yield during the climbing period of Fengyang’s new production line, the gross profit margin decreased by 2.06 PCTs to 8.25% year-on-year, which was lower than expected. In 2022q1, the price of photovoltaic glass remained low. The growth of the company’s shipment led to an increase in revenue of 22.37% to 706 million yuan, but the profitability was not repaired. In the current period, the net profit attributable to the parent company was 11 million yuan, a year-on-year decrease of 76.04%.
The supply of original films is stable, the new production lines have completed the climbing, positioned as ultra-thin glass suppliers, and the shipment is expected to increase significantly. At the original chip end, the three original chip kilns in Fengyang Silicon Valley have been ignited and put into operation, and the company’s original chip supply has been effectively guaranteed. At the same time, with the gradual completion of the climbing of deep processing capacity, the company expects that the sales volume of photovoltaic glass is expected to reach 120 million square meters in 2022, with a year-on-year increase of 67%. The company is located in the production of ultra-thin photovoltaic glass both at the kiln end and deep processing end. In addition, the 1.6mm glass launched by the company for the BIPV market has passed the certification of core customers and began mass production. It is expected that the sales of ultra-thin photovoltaic glass ≤ 2.0mm will account for more than 70% in the whole year, and 1.6mm glass will also realize mass sales, so as to further enhance the company’s competitive advantage of differentiation.
The original production capacity of kiln has accelerated expansion, and it is planned to implement asset restructuring to acquire kiln production capacity. In 2021, the company announced the reorganization plan and planned to acquire 100% equity of Fengyang Silicon Valley intelligent Co., Ltd. at present, all three kilns built in Fengyang Silicon Valley have been put into operation. In addition, there are four kilns with daily melting capacity of 1000 tons in Fengyang Silicon Valley, which are planned to be completed in two phases. At present, two kilns in phase I are under construction. After the completion of the asset acquisition, the company is expected to realize the complete layout from the original photovoltaic glass to the deep processing capacity. With the industry-leading ultra-thin glass production technology, the company is expected to significantly improve its profitability.
Photoelectric glass is expected to open large-scale mass production and delivery, and the company ushers in a new growth pole. In recent years, while laying out photovoltaic glass, the company has actively explored and studied photovoltaic glass technology. It has rich technical accumulation and made breakthrough progress in electronic glass and bonding process. On April 27, the company announced that it plans to invest 2.896 billion yuan in the construction of the project of “annual output of 5 million large-size display optical bonding production lines”. The project will be implemented in three phases, with new production capacity of 1, 2 and 2 million units respectively, After the completion of the production line, the company is expected to start large-scale mass production and delivery of photoelectric glass and create a new growth pole of the company.
Performance forecast: the company is expected to realize a net profit attributable to the parent company of RMB 178 / 359 / 441 million in the three years from 2022 to 2024, corresponding to 19.9 / 9.9 / 8.0 times of PE valuation, and maintain the rating of “overweight”.
Risk tip: downstream demand declines and industry competition intensifies; The size of ultra-thin glass further decreased, and the demand for glass production capacity was lower than expected; The permeability of transparent backplane is improved, and the substitution effect of glass backplane is enhanced.
