\u3000\u3000 Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) (300316)
Event:
The company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will reach RMB 1.58-1.84 billion in 2021, with a year-on-year increase of 84.11% to 114.41%; Net profit deducted from non parent company was RMB 1.515 billion to RMB 1.77 billion, with a year-on-year increase of 84.76% to 115.86%.
Key points of the report:
All business lines were promoted smoothly, with excellent performance in the fourth quarter
In the fourth quarter of 2021, the company expects to realize a net profit attributable to the parent company of 470-730 million yuan, a year-on-year increase of 40.72% to 118.56%, with excellent performance. Focusing on the development strategy of “advanced materials and advanced equipment”, the company benefited from the active promotion of production expansion by downstream silicon wafer manufacturers in the photovoltaic industry. The company actively grasped the market opportunities, continuously improved the equipment delivery capacity, strengthened the technical service quality, and achieved a significant year-on-year increase in order volume, operating revenue scale and operating performance. At the same time, the localization process of China’s semiconductor equipment has accelerated, the company’s semiconductor equipment orders have increased year-on-year, and the company’s Sapphire material business and auxiliary material consumables business have also achieved rapid development, which has made a positive contribution to the growth of the company’s operating performance.
In 2021, the company repeatedly signed large orders, and the orders on hand were at a high level
According to the company’s announcement information, in 2021, the company only signed new orders with Tianjin Zhonghuan Semiconductor Co.Ltd(002129) , Gaojing Cecep Solar Energy Co.Ltd(000591) , Shuangliang Eco-Energy Systems Co.Ltd(600481) for a total of 13.166 billion yuan. According to our estimation, the total number of new orders signed in 2021 may be close to 20 billion yuan. As of 2021q3, the company’s orders in hand totaled 17.76 billion yuan, including 17.034 billion yuan of photovoltaic equipment orders, a year-on-year increase of 210%; Semiconductor equipment orders reached 726 million yuan, a year-on-year increase of 81%. The accelerated expansion of silicon wafer manufacturers made the company’s orders hit new highs, supporting strong performance growth.
Submission of application draft of fixed increase scheme, layout of overweight material + equipment platform enterprises
The company’s current business layout covers advanced materials and equipment such as photovoltaic, semiconductor, sapphire and silicon carbide. Relying on the solid performance Foundation created by its own single crystal furnace equipment, the company will build a material + equipment platform enterprise across multiple fields. In the past six months, the company’s project planning has been gradually implemented, and a joint venture has been established in the field of photovoltaic silicon and applied materials in Hong Kong to broaden the product line of photovoltaic equipment. Recently, the company submitted the application draft of the fixed increase scheme of RMB 5.7 billion, planned to invest in the silicon carbide substrate wafer production base project, expanded the category of semiconductor equipment, and the R & D and verification of semiconductor equipment are expected to accelerate. The new business layout is expected to continue to contribute to the performance increment of the company and create continuous growth through the cycle.
Investment advice and profit forecast
We predict that the company is expected to realize the net profit attributable to the parent company of RMB 1.607 billion, 2.018 billion and 2.501 billion from 2021 to 2023, corresponding to the current PE of 47x, 38x and 30x respectively. Considering the leading position of photovoltaic monocrystalline silicon equipment of the company, and constantly improving the layout of “advanced materials and advanced equipment”, the “buy” rating is maintained.
Risk tips
As a result of the epidemic, the global PV installed capacity was less than expected, the expansion of PV silicon wafer was less than expected, and the promotion of the company’s fixed growth plan was less than expected.
