\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 95 Hubei Feilihua Quartz Glass Co.Ltd(300395) )
Key investment points
The high growth of performance in 21 years was in line with expectations, and the growth rate of 22q1 was accelerated. In 2021, the company realized revenue of 1.22 billion, yoy + 41.7%, net profit attributable to parent company of 370 million, yoy + 55.4%, deduction of non net profit of 350 million, yoy + 51.5%. 22q1 company achieved revenue of 370 million, yoy + 42.2%, net profit attributable to parent company of 90 million, yoy + 20.4%, net profit deducted of 80 million, yoy + 13.2%, and the growth rate was higher than that of 21q4.
The boom in the aerospace sector continued to grow rapidly. In 2021, the company’s revenue of quartz materials and products for semiconductors increased by 29% year-on-year. We believe that it is mainly due to the strong demand for consumer electronic products and the continuous rise of the prosperity of the international semiconductor industry, which promoted the increase of the demand for quartz consumables, superimposed the full production of the company’s synthetic quartz project, and jointly ensured the rapid growth of the company’s semiconductor revenue. In the field of aerospace, we judge that the growth rate of quartz fiber series products is faster. First, the rapid development of national aerospace industry has driven the rapid growth of quartz glass fiber demand. On the other hand, the company continues to develop new quartz fiber products and extends down the industrial chain to the field of high-end composite material manufacturing. In 2021, two types of composite products were successfully developed, and all indicators met the requirements. They passed the examination of relevant tests and were recognized and highly praised by users. The large volume of some downstream models is expected to drive the quartz fiber to maintain a high growth.
The construction of production capacity has been continuously promoted, and the technical strength has been further enhanced. In 2021, the company’s new quartz glass fiber workshop was fully put into use, the production capacity of quartz glass fiber increased rapidly, and continued to maintain the leading position in the industry to meet the needs of customers. The holding subsidiary Shanghai Shichuang plans to invest 300 million yuan in the processing project of high-purity quartz products for semiconductors, and Hefei Guangwei optoelectric Technology Co., Ltd. has completed the construction of the main plant. In 2021, the company acquired Zhongyi technology, pushing the company’s quartz glass fiber products to the field of fine textile. The new electronic special material manufacturing project invested by Zhongyi technology has entered the capping stage, and 22q4 is expected to be put into use. In 2021, the company made steady progress in technology research and development and process improvement. The research and development of high-purity and less bubble quartz ingot project was successful, the products entered the batch production stage, and the quality was recognized by customers; Large size synthetic quartz ingot and gas continuous melting quartz cylinder can be produced in a stable and mass manner; Low hydroxyl infrared optical quartz glass has been successfully used in aerospace projects.
Leading high-end quartz products, benefiting from the downstream boom, can expect rapid growth. 1) Semiconductor field: we expect that the prospect of semiconductor industry chain will continue, and the national strategic requirements of independent and controllable industrial chain will be superimposed. The highlight time of quartz glass semiconductor field has come. The company has the qualification of original factory certification of semiconductor equipment (the fifth in the world and the first in China to obtain the certification of Tokyo electronics, Yingcai and lam in the field of etching). It has significant advantages in technology and customer certification, leading cost and quality, and is expected to maintain high growth. 2) Military industry: during the 14th Five Year Plan period, the development of launch vehicles, satellites, space vehicles, space stations and other equipment continued to be in an era of strong demand, and the development of aerospace has high growth. The company has military supply qualification and is the leading supplier of quartz glass fiber in China’s aerospace field, which is expected to benefit directly. 3) Quartz products and composite materials: the company is committed to extending the industrial chain, expanding the market and increasing profits. It is gradually forming a whole industrial chain layout of the integration of quartz glass materials and products, and the integration of quartz glass fiber materials, three-dimensional weaving and composite materials.
Investment suggestion: we slightly lowered the company’s net profit attributable to the parent company in 22-24 years to RMB 480, 650 and 800 million (the original forecast of net profit attributable to the parent company in 22-23 years was RMB 520 and 670 million). Mainly considering the rise in the price of raw material high-purity quartz sand, we raised the cost assumption. The adjusted profit forecast corresponds to 35, 26 and 22 times of the current stock price PE, maintaining the rating of “overweight”.
Risk tip: the demand for semiconductor and optical communication has fallen sharply; The expansion of new products is less than expected; The equipment of military weapons was not as expected; The progress of the fixed raising investment project was affected.
