On August 15, the company released the 2022 semi-annual report. From January to June 2022, the company achieved operating income of 1,469 million yuan, an increase of 67.63% over the previous year, achieved net profit of 43 million yuan, an increase of 84.65% over the previous year, net profit after deducting non-return net profit of 28 million yuan, an increase of 163.42% over the previous year.
Among them, the revenue of solar glass was 1,355 billion yuan, an increase of 79.26% over the previous year. In Q2 2022, we achieved revenue of 764 million yuan in a single quarter, an increase of 154.64% over the previous year, and net profit of 23 million yuan, an increase of 176.81% over the previous year. This mainly benefited from the further release of the company's ultra-thin photovoltaic glass production capacity, which ensured the smooth execution of long orders signed between the company and mainstream component strategic customers and the development of other high-quality customer groups.
Fengyang Silicon Valley's original production capacity will make up for the shortfall, and the company's profit margin will improve. The company will merge and absorb the production capacity of the majority shareholder photovoltaic glass original film, which is expected to make up for the company's shortcomings in the original film. At present, all three production lines for the first phase of Fengyang Silicon Valley have been put into operation, and construction of the second phase of the project has begun one after another this year. The company is transitioning from a single glass deep processing business model to an integrated “original film+deep processing” business model. In the future, it can effectively improve the company's overall competitiveness and further improve the company's production efficiency and profit level.
1.6mm ultra-thin glass has received a large order, and the competitive advantage of differentiation is expected to be strengthened. The company has been deeply involved in the field of photovoltaic deep processing for many years. It is one of the few domestic enterprises that has achieved mass production of photovoltaic glass below 2.0mm. Currently, 1.6mm glass has been supplied to customers in bulk. On June 27, the company announced that it signed a “Strategic Cooperation Agreement” for 1.6mm ultra-thin photovoltaic glass with Tianhe Solar. The two sides agreed to sell 337.5 million square meters of 1.6mm photovoltaic glass from June 1, 2022 to December 31, 2025, with an estimated amount of about 7.425 billion yuan. The cooperation between the company and Tianhe has enhanced the company's competitive advantage in the field of thin glass, helped promote 1.6mm glass within the industry, and brought more room for the company to grow its performance. In the future, the company will focus on the thin glass field and form a differentiated competitive pattern with its competitors.
The BIPV market space is huge, and the company is expected to enter the fast track of development. In the context of the country's policy of vigorously promoting “carbon neutrality” and green buildings, the BIPV industry may usher in an explosion in demand. The company has been involved in the BIPV field since 2012 and has extensive project experience. At the same time, the weight and cost of 1.6mm glass has certain advantages compared to current mainstream photovoltaic glass, and is more suitable for BIPV scenarios.
In addition to this, as a supplier for Tesla's solar roof project, the company began gradually increasing the supply of solar tile glass, etc. to it in 2019.
E-glass may become the second biggest increase in the company's performance. The company laid out electronic glass precision processing in 2016, and now electronic glass production capacity has begun to expand. 2022H1 achieved revenue of 51 million yuan, an increase of 29.96%. In the future, electronic glass is expected to become the company's new performance growth point.
[Investment advice]
The company is deeply involved in the photovoltaic glass industry and is a leader in ultra-thin glass in China, and through the acquisition of Fengyang Silicon Valley, the company made up for the shortfall in production capacity of the original film and gradually transitioned to an integrated business model. Furthermore, the company's layout in BIPV and electronic glass is ahead of schedule, and future production capacity expansion is expected to help the company's performance grow further.
The company's revenue for 2022-2024 is estimated to be $31.31, 4422, and $5.584 billion, respectively, and net profit of $1.38, 2.31, and 424 million yuan respectively, corresponding to EPS of 0.69, 1.16 and 2.13 billion yuan, respectively. The corresponding PE values for 2022-2024 were 63.37, 37.93, and 20.61 times, respectively, and given a “increase in holdings” rating.