\u3000\u3 Shengda Resources Co.Ltd(000603) 260 Hoshine Silicon Industry Co.Ltd(603260) )
Event: on the evening of May 19, the company released the fixed increase plan for 2022. The number of shares to be issued by this fixed increase is no more than 106 million, and the fixed increase price is 66.30 yuan / share. The proposed fund-raising of 7 billion yuan is used to supplement working capital (after deducting the issuance expenses). The subscription objects of this fixed increase are Ms. Luo Yi and Mr. Luo Yedong, the shareholders and actual controllers of the company, who will subscribe for 3.5 billion yuan respectively.
At the bottom of the share price, a full subscription of 7 billion yuan will be made again, demonstrating the firm confidence of the actual controller. As of May 19, Luo Liguo, the actual controller of the company, and his children, Ms. Luo Yi and Mr. Luo Yedong, directly held 25.55% of the shares of the company, and indirectly held 50.89% of the shares of the company by holding 100% of the shares of Hesheng group, the controlling shareholder of the company. In total, they held 821 million shares of the company, equivalent to 76.44% of the shares of the company. After the issuance of this fixed increase, the shares of the company held by the above three actual controllers through direct shareholding and indirect shareholding will increase to 78.55%. Previously, the company raised a fixed increase of 2.5 billion yuan in 2020, which was also fully subscribed by Ms. Luo Yi and Mr. Luo Yedong, the actual controllers of the company. According to wind data, as of May 19, 2022, the company’s pe-ttm valuation was about 10.8 times, which was in the 4.2% quantile since the company’s listing and 5.8% quantile since the last year. At the same time, it was about 58.7% lower than the company’s historical pe-ttm average. At the bottom of the current valuation, the actual controller of the company once again subscribed for a fixed increase of 7 billion yuan, further increasing the shares of the company, showing the firm confidence of the actual controller of the company in the follow-up development of the company.
Continue to expand production capacity and consolidate the leading position of the silicon industry. By the end of 2021, the company has an industrial silicon production capacity of 790000 tons / year and a silicone monomer production capacity of 930000 tons / year. In terms of capacity under construction, the eastern Hesheng 400000 T / a industrial silicon project and Yunnan Hesheng 400000 T / a industrial silicon phase I project will be completed and put into operation in Q2 and Q4 respectively in 2022. Shanshan phase II 200000 t / a siloxane project has been completed and put into operation in Q1 2022, while Shanshan phase III 200000 t / a siloxane project is expected to be completed in Q4 2022. In addition to the above projects, the company further plans to have a capacity of 400000 T / a industrial silicon (Yunnan phase II), 800000 T / a silicone monomer (Yunnan phase I and II) and 200000 t / a polycrystalline silicon (Xinjiang) in the medium and long term. With the gradual production of the company’s planned capacity, the company’s market share in the silicon material industry is expected to be further improved. In the future, it will fully benefit from the development of the silicon material industry and maintain a stable leading position.
Profit forecast, valuation and rating: this fixed increase does not involve relevant new construction projects, which will not have a significant impact on the company’s subsequent performance. We maintain the company’s profit forecast from 2022 to 2024. It is estimated that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 9.4/10.2/11.3 billion respectively. The company’s capacity expansion plan is clear, and the actual controller subscribes for the large rated increase again, which shows firm confidence, continues to be optimistic about the company’s follow-up development as a leader in the silicon industry, and maintains the company’s “overweight” rating.
Risk tips: macroeconomic fluctuation risk, production capacity construction is less than expected, product price fluctuation risk, energy consumption policy impact.
