Event: the company issued an annual performance forecast for 2021. In 21 years, the company is expected to achieve a net profit of 26-2.7 billion yuan, an increase of 344% over the same period last year. It is expected to deduct a net profit of 26-2.7 billion yuan, an increase of 548% over the same period last year. Among them, Q4 is expected to achieve a net profit of 10-1.1 billion yuan in the single quarter, an increase of 131% Mel 154% over the same period last year and 32% Mel 45% over the previous year.
Comments:
"Silicon + glyphosate" two-wheel drive, price rise contributed to substantial growth in performance: in the past 21 years, the supply and demand pattern of metal silicon, organosilicon and glyphosate has improved significantly, prices have risen significantly, and the company's profitability has improved significantly. In 21 years, the average prices of metal silicon, organosilicon and glyphosate were 23,000 yuan / ton, 32,000 yuan / ton and 48,000 yuan / ton respectively, up 95%, 70% and 106% over the same period last year. In addition, the strategic layout of the company's "silicon + glyphosate" has a significant synergistic effect: dilute hydrochloric acid, a by-product in the production of organosilicon, is the raw material for the production of glyphosate, while chloromethane, a by-product of glyphosate, is one of the raw materials for the production of silicone monomers. The company's comprehensive production cost advantage is prominent. The industry boom has promoted the low-cost competitive advantage of the superimposed company, which has contributed to the substantial growth of the company's performance in the past 21 years.
Deepen the layout of the silicon-based industrial chain and create a new momentum for performance growth: the company focuses on the upstream and downstream of the organosilicon business layout of the industrial chain, basically realizing self-supply of metal silicon upstream, while making positive progress in the layout of middle and high-end products downstream. Its current production capacity of metal silicon is 100,000 tons / year, Yunnan Yanjin 100,000 tons / year production capacity project, 200,000 tons / year industrial silicon powder processing project is promoted in an orderly manner. At a time when the demand for silicon metal is increasing rapidly and the supply is tight due to power and production restrictions, based on the advantage of self-production and supply of raw materials, the company can not only fully enjoy the dividends brought by the rising prices of raw materials, but also ensure the profitability of silicone business. The company has an existing silicone monomer production capacity of 490,000 tons per year, of which about 80% are used for self-use in the production of downstream raw rubber, 107 rubber and other polymers, as well as end products such as mixed rubber, liquid glue, sealant and other terminal products. 21-year product sales have increased significantly compared with the same period last year, effectively improving the company's business performance. In addition, the company focuses on 5G, new energy vehicles, UHV, medical and health and other emerging industries, focusing on the development of silicone terminal application technology, deepening the layout of the silicon-based industry chain, and cultivating new momentum of performance growth.
The prosperity of the glyphosate industry continues to rise, and the company fully benefits: with the high prosperity of agricultural products, the enthusiasm of downstream farmers to grow, and currently in the peak season of traditional procurement in North America, paraquat is banned in many countries around the world. Glyphosate as a substitute will expand market share, glyphosate demand will increase, the trend of tight supply and demand in the industry is becoming more and more obvious, glyphosate prices may maintain an upward trend in the short term. The company currently has a production capacity of 80,000 tons of glyphosate and will fully benefit from the rise in glyphosate prices.
Earnings forecast, valuation and rating: due to the rising momentum of the glyphosate and silicone industry chain in 21, we raised the company's 21-year profit forecast and maintained its 22-23 profit forecast. It is estimated that the 21-23 year net profit of the company will be 26.12 (up 8%) / 26.192.842 billion yuan respectively, equivalent to 3.19 EPS 3.20pm 3.47 yuan per share, maintaining the "buy" rating.
Risk hints: production progress is not as expected; prices of major raw materials fluctuate; policies are tighter