Event: the company released the third quarter report of 2022, the first three quarters of 2022 achieved revenue of 2.053 billion yuan (year-on-year + 81.42%), net profit of 623 million yuan (+ 152.27%), of which 22Q3 realized revenue of 714 million yuan (year-on-year + 43.58%) and net profit of 218 million yuan (+ 120.06%).

The "two silicon" products continue to develop, and the silane coupling agent products provide support: the company's two silicon products developed steadily during the reporting period. In terms of trichlorosilicon, China's photovoltaic, new energy and other industries maintain a high development rate at present. The polysilicon industry still has a large number of new construction and expansion projects, and there is a strong demand for photovoltaic grade trichlorosilicon, its upstream raw material. At the same time, the prosperity of silane coupling agent industry has also improved with the gradual economic recovery at home and abroad, and there is also a continuous demand for its raw material trichlorosilicon. In the aspect of high-purity silicon tetrachloride, with the development of the communication industry in our country, the demand for drawing optical fiber preform is increasing, which forms a strong demand for high-purity silicon tetrachloride. During the reporting period, the company's sales and prices of silicon series products increased. According to the announcement, the sales volume of silicon series products in the first three quarters of 2022 was + 3.33% year-on-year, and the price was + 109.64% year-on-year, driving the revenue of silicon series products + 116.62% year-on-year. In addition, the company's silane coupling agent production capacity is gradually released, and the overall operation is stable at present. According to the announcement, the company's silane coupling agent products achieved an output of 11300 tons, sales of 8300 tons and revenue of 241 million yuan in the first three quarters of 2022. Provide strong support for the company's performance increase. At the same time, the overall production and marketing of the company's gaseous silica products are good, providing strong support for the improvement of the company's profitability.

The product production capacity continues to increase, and the integration advantage is expected to be strengthened: the company continues to expand its own scale. According to the announcement, the company's 50,000 tons / year trichlorosilicon project has entered the overall completion stage. In addition, an announcement was issued in June 2022. The proposed construction of the "722,000 tons / year trichlorosilicon expansion project" will continue to develop on the basis of the existing scale advantages. In the future, with the gradual progress of the project, the company's leading position is expected to continue to improve. At the same time, the company extends to the downstream step in an orderly manner, according to the announcement, the company's electronic grade trichlorosilicon has achieved continuous supply to downstream customers, electronic grade dichlorodihydrosilicon products have achieved batch supply to downstream customers. In addition, in July 2022, the company announced that it planned to invest 232 million yuan to build a "project with an annual production capacity of 30,000 tons of allyl chloride". According to the announcement, after the project was put into production, the proportion of raw materials supplied by the company's silane coupling agent products would be effectively increased and the production cost would be further reduced. In the future, with the gradual landing of various projects, the company's upstream and downstream integration advantage is expected to be significantly strengthened, the company is expected to fully benefit.

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