\u3000\u3000 Yangling Metron New Material Co.Ltd(300861) (300861)
Increase sales and reduce costs, and the performance of King Kong line leader returns to high growth in 2021
The company expects to realize a net profit attributable to shareholders of listed companies of RMB 684-836 million in 2021, with a year-on-year increase of 52.11% – 85.91%. The main reason for the performance growth is that the company expanded its production capacity and developed downstream customers, realizing a significant increase in product sales. And the competition of new products is low, and the pressure of price decline is small. Cost reduction and efficiency increase keep the profit of diamond line business at a high level. We maintain the previous profit forecast. It is expected that the net profit attributable to the parent company from 2021 to 2023 is expected to reach 834 / 1017 / 1194 million yuan, EPS is 2.08/2.54/2.99 yuan / share respectively, and the corresponding P / E ratio of the current stock price is 31.8/26.0/22.2 times respectively, maintaining the “buy” rating.
Thin line technology maintains high profitability and effectively expands the safety margin
The company’s leading thin line technology meets the needs of downstream wafer slicing and maintains a high profit level. At present, the company’s diamond line has exceeded 36 μ m. The main products are 42 μ m. 45 leading the mainstream products in the same industry μ m. Comply with the demand for thin wires in the downstream wafer slicing trend. Although the price rise of silicon material brings great pressure to silicon wafers, the proportion of diamond wire in the total cost of silicon wafers is only 5-8%. The pressure of cost reduction is not easy to be transmitted to diamond wire. Thanks to the company’s leading thin wire technology and low product competition, the pressure of price decline in the future is small. With the further cost reduction and efficiency increase of the company, we expect that the gross profit margin of the company’s diamond line will remain above 60% from 2021 to 2023, with a wide margin of safety compared with the average level of less than 40% in the same industry.
The company’s performance is expected to maintain rapid growth by integrating the upstream, transforming and putting into operation and superimposing the growth of downstream demand
(1) upstream: bus accounts for 40% of the cost of diamond wire. After the acquisition of baomeisheng in 2020, the company will realize the independent supply of bus, which is expected to further reduce the cost of diamond wire; (2) Capacity: in 2021, the company completed the transformation of the “single machine six line” production line, increasing the existing capacity by 50%. In addition, after the new 500 efficient production lines are gradually put into operation, the production capacity is expected to reach 70 million km by the end of 2021 and 100 million km by 2022; (3) Demand: according to the CPIA forecast, the demand for silicon wafers is expected to reach 245gw in 2022, with a year-on-year increase of 93%. Based on the 375000 km per GW of wire consumption, the demand for new diamond wires is expected to exceed 90 million km; In addition, the price of silicon material continues to maintain a high level. The thinning will increase the wire consumption per GW of silicon wafer, which is expected to promote the further growth of diamond wire sales, so as to drive the company’s performance to maintain high-speed growth.
Risk tip: the development of thin line technology is stagnant, the cost decreases slowly, and the demand for downstream silicon wafers is less than expected
