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21. High performance increase, 22q1 decline, production line technical transformation and Cecep Solar Energy Co.Ltd(000591) provision for impairment. The company’s 21 / 22q1 revenue is 13.63/2.79 billion. YoY+27.7/-7.4%； Net profit attributable to parent company: 1.53/380 billion, yoy + 96.2 / – 33.1%. The high increase of glass price in 21 years and the decline of 22q1 are the main reasons for performance fluctuation. In the past 21 years, the accrued asset / credit impairment was RMB 980 million / 150 million, totaling RMB 1.13 billion, mainly due to the impairment of Qingyuan second-line technological transformation assets and Cecep Solar Energy Co.Ltd(000591) business, and the risk was released smoothly.
The performance of float glass has increased, and the profit of engineering glass is under pressure. Under the environment of substantial increase in glass price in 21 years, the company’s 21 float glass revenue / profit yoy + 47 / + 170% is the main reason for performance growth. Since 21q4-22q1, the completion of real estate has been weak, the cost of raw materials has risen, the price and gross profit of float glass have dropped, and the gross profit margin of the company in 22q1 is 28.3%, yoy-9.0pct. Considering that the real estate is still resilient after 22 years of completion, float glass still has some room to play. In the 21st year, the income of engineering glass was yoy + 24%. Due to the sharp rise in the price of float glass, the company’s engineering glass received a certain impact in the 21st year. With the decline in the price of float glass, the profit of engineering glass and aquatic products has returned to normal. Due to the credit impairment of RMB 100 million due to the collection of customers’ Evergrande business tickets, under the influence of raw material fluctuations and credit impairment, the engineering glass yoy-76% in 21 years. Considering that Wujiang, Xianning and other bases will reach production capacity one after another in the future, the market share and market influence of engineering glass are expected to be further improved.
The unit price of photovoltaic glass fell and the burden of Cecep Solar Energy Co.Ltd(000591) business assets was released. Due to the lower than expected growth of photovoltaic installed capacity in 21 years and the accelerated production of photovoltaic glass capacity, the price of photovoltaic glass has dropped, and the company’s profit of photovoltaic glass in 21 years is yoy-38%. However, the company’s Fengyang and Xianning projects continue to be constructed. It is expected that the ignition will be gradually started from 22q2, and the production capacity will be greatly improved, leaping to the first tier of the industry In terms of Cecep Solar Energy Co.Ltd(000591) business, the company started the technological transformation of Nanchang polysilicon and resumed production in 22q1. At the same time, it sorted out the stock assets, impaired the assets of backward production lines, and successfully released the asset burden. In 21 years, the company’s Cecep Solar Energy Co.Ltd(000591) business income was 1.07 billion, and the net profit after asset impairment was – 670 million.
Electronic glass has a bright performance and is expected to accelerate its growth after product upgrading. In the past 21 years, the company’s electronic display business performed well, with a revenue of 1.9 billion, yoy + 75%; The profit after impairment is 240 million, yoy + 46%. The successful industrialization of the company’s high aluminum second generation (kk6) products and their extensive use in high-end customers in China, and the completion of the certification of high aluminum third generation (kk8) are the main reasons for the rapid growth of the company’s electronic glass business. In 22 years, Qingyuan front line of the company is expected to complete technical transformation and mass produce kk8, and continue to realize the domestic substitution logic. Kk8 mass production is expected to significantly improve the profit level of the company’s electronic glass. At the same time, the 110t / D ultra-thin electronic glass production line under construction in Hebei is expected to be put into operation. After being put into operation, the company will realize the full coverage of three generations of high aluminum to different levels of Chinalco and nano calcium and electronic glass products, so as to further enhance the company’s market influence.
Profit forecast and investment suggestions
Considering the falling price of float glass, the resumption of polysilicon production and electronic glass of the company are expected to increase significantly. We adjust the profit forecast and expect the company’s eps0.5 in 22-24 years 79 / 1.28/1.79 yuan (originally predicted EPS of 22-23 years is 0.93 / 1.33 yuan). Referring to the level of peers, float glass / engineering glass / electronic glass / photovoltaic glass / Cecep Solar Energy Co.Ltd(000591) business 7 / 7 / 16 / 22 / 9xpe was given respectively, with a reasonable market value of 27.6 billion and a corresponding target price of 8.99 yuan, maintaining the “buy” rating.
Risk tips
Real estate investment fell, raw material prices rose rapidly, the mass production of electronic glass was less than expected, and the progress of the new production line did not meet expectations
