Photovoltaic / float / pharmaceutical glass and other diversified development, natural gas cost and other core advantages may promote the company to become a photovoltaic glass "dark horse" company.
Ancai Hi-Tech is a national key high-tech enterprise, mainly engaged in photovoltaic glass, float glass and natural gas business. The company has more than 20 years of electronic glass and more than 10 years of photovoltaic glass manufacturing experience and technical development, acquired float glass business in 2021, and invested in pharmaceutical glass in 2022. In recent years, the company has benefited from the rapid development of the photovoltaic industry, with revenue / return net profit CAGR reaching 18.3% and 119.0% respectively in 2019-2021.
The company has the following core competitiveness: 1) technological innovation capability: more than 400 patents have been applied for in the fields of color display device glass, solar glass and other products; there are more than 40 patents in the photovoltaic glass industry, realizing full specification coverage of 2.0mm-5.0mm thickness photovoltaic glass, and the company is the only two domestic enterprises with batch production capacity of photothermal glass. 2) personnel advantages: Ancai Hi-Tech has a national enterprise technology center and postdoctoral research workstation, and the talent team has more than 30 years of glass production experience; after the photovoltaic glass 1800t/d capacity is put into operation, the ratio of labor and capital will be optimized and the unit labor cost will be reduced. 3) Resources and energy advantages: Ancai Energy, a holding subsidiary, operates the natural gas pipeline transportation business of the west-to-east branch line of Henan Province, whose low price, high quality and stable gas supply provide a guarantee for the sustained and stable production of Ancai Hi-Tech; 4) capacity expansion advantages: at present, the company has a 600t/d ultra-white float glass furnace and supporting deep processing production line, with ultra-white float glass, photothermal glass and other production capacity. In order to break through the bottleneck of photovoltaic glass production capacity, Jiaozuo and Xuchang photovoltaic glass projects were ignited in April this year, coupled with the original 900t/d production capacity, photovoltaic glass production is expected to reach 2700 t / d in the fourth quarter of 2022; in March 2022, the company announced a new 10,000 tons / year drug glass production line, which is expected to drive the performance to a new level.
Expanding production and reducing costs ushered in the golden era of the company, and the gap between the company's profitability and the leader is expected to continue to narrow.
The photovoltaic industry is highly prosperous, and the demand for photovoltaic glass is improving. According to the optimistic forecast of CPIA in the "Roadmap for the Development of China's Photovoltaic Industry", the average annual installed capacity of global photovoltaic will exceed 220GW during the 14th five-year Plan period. In the photovoltaic module, the demand for photovoltaic glass of the double glass module is at least 25% higher than that of the single glass module, and has the advantages of higher power generation and longer life cycle. With the increase of the permeability of double glass modules, the market demand of photovoltaic glass will further increase.
The company's revenue from photovoltaic glass reached 1.3 billion yuan in 2021, with a gross profit margin of 25% and a gross profit margin of 49% and 33% respectively for 2022CAGR 2019-PV. 2022H1 photovoltaic glass products on-hand orders totaling 500 million yuan; at the same time, signed a strategic cooperation agreement with well-known domestic photovoltaic module manufacturers, the contract term is three years, is expected to be 2.539 billion yuan. The company has ushered in the golden period of development since listing, the photovoltaic glass production business is full of points: 1) capacity expansion helps increase revenue: as of June 2022, the company has only one production line of 900 tons per day in production, and capacity utilization tends to be saturated. Jiaozuo Ancai 180000 tons photovoltaic glass production line and Xuchang Ancai annual photovoltaic light substrate project were ignited in April 2022 and are expected to be put into production in the second half of 2022. After putting into production, the company's photovoltaic capacity will be nearly doubled; 2) cost reduction promotes profitability: the main cost of producing photovoltaic glass comes from soda ash, quartz sand and natural gas. Among them, since the price of soda ash rose and fell in the second half of 2021, the downstream demand has been difficult to improve, and we expect that it will be difficult for the price of soda ash to rise in 2023. In terms of quartz sand, the company acquired Changzhi Zhenghe Mining Co., Ltd. in June 2022, self-mining quartz sand for glass production. In terms of natural gas, the company has been engaged in natural gas sales for a long time, of which 2022Q1 accounts for 15.54% of natural gas for self-use, which is cheaper than the natural gas purchased by competitors. We are optimistic that the company's photovoltaic glass business revenue will grow rapidly in the future, with good cost control ability, and the gross profit margin is expected to be further improved.
Stripping off the "burden" of natural gas trade and restructuring
In 2003, the company undertook the construction of the West-East Henan North Branch Line, cut into the field of natural gas, and contracted the transportation of natural gas pipelines and the sales and trade of CNG and LNG. The revenue / share of natural gas business in 2021 was 1.78 billion yuan / 53.33% respectively. On June 20 this year, Ancai Hi-Tech announced that it plans to sell assets related to LNG and CNG trading and gas station business to Henan Investment Group Co., Ltd., the company's controlling shareholder, or its holding subsidiary. There is a great demand for natural gas in the company's main glass business, and it is expected that the proportion of pipeline natural gas for self-use will rise to more than 50% in the future. Although the sales and trade of CNG and LNG are large, the gross profit is only 5.16%. By spinning off part of its gas business this year and acquiring photothermal technology last year, the company can focus on developing photovoltaic glass, photothermal glass and medicinal glass with higher technology added value and higher gross profit margin.
Profit forecast
Regardless of the impact of additional issuance on performance and equity, we predict that the company's operating income from 2022 to 2024 will be 47.31,56.89 and 6.64 billion yuan respectively, the net profit will be 2.68,3.75 and 528 million yuan respectively, the EPS will be 0.31,0.43 and 0.61 yuan respectively, and the current stock price is 22.3,15.9 and 11.3 times of PE respectively.
Risk hint
1) the project production progress is not as expected; 2) the cost reduction is not as expected; 3) photovoltaic glass overcapacity; 4) raw material costs continue to rise; 5) photovoltaic installed capacity is lower than expected.