Event: the company issued a half-year performance forecast for 2022, and it is estimated that 22H1 will achieve a net profit of 3.96-425 million yuan (year-on-year + 167.83% earnings 187.44%). At the same time, the company announced that it intends to invest 232 million yuan to build a "project with an annual production capacity of 30,000 tons of allyl chloride".

The prosperity of "two silicon" products has improved, and product prices have risen compared with the same period last year. In terms of trichlorosilicon, under the background of China's continued efforts to achieve the goal of "double carbon", photovoltaic, new energy and other industries are developing rapidly, and the industry boom continues to rise. at present, China's polysilicon industry has many new construction and expansion projects, resulting in a strong demand for photovoltaic grade trichlorosilicon. At the same time, the silane coupling agent industry is also booming with the gradual recovery of macro-economy at home and abroad, and there is also a continuous demand for its raw material trichlorosilicon. The company currently has a production capacity of 65,000 tons of trichlorosilicon per year, which has a significant advantage as a leader in the subdivision industry. In terms of high-purity silicon tetrachloride, the global demand for optical fiber and cable continues to increase, resulting in a strong demand for high-purity silicon tetrachloride. During the reporting period, the price of trichlorosilicon products increased under the demand drive, the production of high-purity silicon tetrachloride products was stable, and the production, sales and prices increased significantly compared with the same period last year. In addition, the production capacity of the company's silane coupling agent project has been gradually released since the trial production of 21Q4. At present, the overall operation is stable, the product promotion to the downstream is relatively smooth, the production and marketing of gaseous silica products are good in the reporting period, the product quality is stable and has been highly recognized by downstream customers, which provides some support for the company to improve its profitability.

Each project progresses smoothly, and the integration advantage is further strengthened: the company continues to expand its scale. In 2021, the company has planned and built a 50, 000 tons / year trichlorosilicon project, involving 50, 000 tons / a capacity of trichlorosilicon and 20, 000 tons / an of silicon tetrachloride products. It is expected to enter trial production in 22Q3. In addition, a notice will be issued in June 2022 to invest 75.2652 million yuan to build the "722,000 tons / year trichlorosilicon expansion project". In the future, with the gradual progress of the project, the production capacity of the company's two silicon products is expected to increase significantly. At the same time, the company extends to the downstream step by step, according to the announcement, the company's electronic grade trichlorosilicon products have formed stable sales, and the market certification process of electronic grade dichlorodihydrosilicon products is smooth. In addition, the company's silane coupling agent project continues to move forward. according to the announcement, the second phase of the "annual production of 73000 tons of silane coupling agent series project" will be fully put into production in 2022. In addition, the company's investment in the construction of the "annual production of 30,000 tons of allyl chloride project"

The allyl chloride products involved are the raw materials needed for the company's silane coupling agent project, which will effectively increase the self-supply proportion of raw materials of the company's silane coupling agent products and further reduce the production cost. In the future, with the gradual landing of various projects, the company's upstream and downstream integration advantages are expected to be further strengthened, providing a strong boost for the company's future profitability.

Investment advice: we expect the company's net profit from 2022 to 2024 to be 854 million yuan, 1.042 billion yuan and 1.333 billion yuan respectively, maintaining the buy-An investment rating.

Risk hints: research and development is not as expected; projects under construction are not as expected; macro environment is not as expected