Liancheng CNC (835368)
Company events: the company released the annual report of 2021 and the report of the first quarter of 2022: in 2021, the company achieved a revenue of 2.04 billion yuan, a year-on-year increase of 9.98%; The net profit was 346 million yuan, a year-on-year decrease of 8.89%. The net cash flow from operating activities was 151 million yuan, a year-on-year increase of 352%. In 2022q1, the revenue was 322 million yuan, a year-on-year increase of 2.89%, and the net profit was 914625 million yuan, a year-on-year increase of 18.60%.
The company is committed to the development of photovoltaic and semiconductor industry. Its main products include single crystal furnace, wire cutting equipment, grinder, intelligent production line, battery chip equipment, etc. it is an integrated service provider providing various support for crystal material growth, processing equipment, key auxiliary materials and core technology. According to the 2021 annual report released by the company, the overall revenue scale of the company has increased to a certain extent in 2021. Single crystal furnace, wire cutting equipment and grinder are still the leading products, realizing a sales revenue of 1.776 billion yuan, accounting for 87.04% of the operating revenue in the reporting period. Among them, the revenue of wire cutting equipment in 2021 was 545 million yuan (+ 19.12%), the sales revenue of single crystal furnace was 1097 million yuan (- 3.55%), and the sales revenue of grinder was 134 million yuan (+ 4.95%). Meanwhile, during the reporting period, the company added battery equipment and silver powder business, realizing an income of 410856 million yuan, accounting for 2.01% of the operating income. In terms of a single quarter, the revenue of 2021q4 company was 909 million yuan, a year-on-year decrease of 10.68% and a month on month increase of 187.41%; The net profit attributable to the parent company was 169 million yuan, a year-on-year decrease of 24.32% and a month on month increase of 218066%. At present, the newly signed contract amount of the company’s main products is 2.684 billion yuan, and the executable order amount of the main products is about 2.200 billion yuan. The company’s business is advancing steadily.
Affected by the “carbon neutralization” policy, the photovoltaic industry continued to improve and launched a new single crystal furnace slicer to improve the strength of the company: in 2021, with the continuous promotion of favorable policies such as “carbon neutralization”, “14th five year plan” and “Paris Agreement” on the development of the industry, the national photovoltaic market still maintained a growth trend. According to CPIA statistics, the newly added photovoltaic grid connected installed capacity in China in 2021 was 54.88gw, a year-on-year increase of 13.9%. At the same time, the output scale of all links of the photovoltaic industry has maintained stable growth, the proportion of photovoltaic power generation has increased rapidly, and the speed of energy transformation has accelerated. In terms of photovoltaic business, the company has continuously increased R & D investment and continued technological innovation. In June 2021, the company participated in the 15th (2021) International Cecep Solar Energy Co.Ltd(000591) photovoltaic and smart energy (Shanghai) Exhibition (snec2021), and exhibited the 1600mm diameter single crystal furnace kx380pv and new slicer for the first time, meeting the technical requirements of large-size silicon wafers. At the same time, the company promoted the whole line delivery business of photovoltaic silicon wafer production equipment and the implementation of new businesses such as silicon carbide, graphite and sapphire, so as to consolidate the driving force of the company’s long-term sustainable development. In addition, the holding subsidiaries of the company, Liancheng Kekes, weikate and Shanghai lanyue, have all obtained the high-tech enterprise certificate. During the validity period of their high-tech enterprise qualification, the enterprise income tax can enjoy the preferential policy calculated and paid at the tax rate of 15%, so as to inject new impetus into the future development of the company.
The capacity of semiconductor silicon wafers continues to expand and the layout is improved around the industrial chain: with the interest in downstream new energy vehicles, 5g and other fields, according to the prediction of the forward-looking Industry Research Institute, the demand for semiconductor silicon wafers in China is expected to increase rapidly, and the scale of China’s semiconductor silicon wafer market will increase from US $2.3 billion in 2021 to US $4.3 billion in 2026. At present, the semiconductor industry is facing the threat of material shortage and broken industrial chain. It is a necessary solution to realize the independent production and control of semiconductor silicon wafer materials. With the continuous attention and increase of national investment in the semiconductor industry chain, the company also continues to strengthen and improve its layout in the semiconductor field. In 2021, the company completed the acquisition of 60.00% shares of Aihua semiconductor, and the company continued to expand its production. In 2021, the “new semiconductor materials and equipment Wuxi R & D center” established by Liancheng Kekes, a wholly-owned subsidiary of the company, was officially unveiled, which is mainly used to study advantageous materials and develop core equipment in photovoltaic and semiconductor fields, laying a solid foundation for the company to enrich the company’s product structure and enhance industrial competitiveness. In October 2021, the company’s phase II plant in Dalian was completed and put into use. In early November, the plant successfully completed the production of the first batch of machine tools, and the company’s production capacity was further improved.
Investment suggestion: relying on silicon wafer equipment as the core, the company intervenes in core equipment and auxiliary materials around the photovoltaic and semiconductor industry chain, and integrates upstream and downstream high-quality resources. The main direction of new product research and development includes automatic production equipment for the growth, processing and processing of silicon carbide, electronic grade silver powder, sapphire, graphite and other crystals. At present, the latest market value of the company is 12.1 billion yuan, pettm34x. It is recommended to pay attention.
Risk warning: the risk of relatively concentrated customers and high proportion of connected transactions, the risk of large balance of accounts receivable, industry fluctuation and policy risk
