Profits rose sharply in the first three quarters and gross profit margin remained high. The company released the third quarter report of 2022, with revenue of 2.05 billion yuan (year-on-year + 81.4%) in the first three quarters and net profit of 620 million yuan (+ 152.3% year-on-year).
Of this total, the revenue in the third quarter was 710 million yuan (year-on-year + 43.6%, month-on-month-11.5%); the net profit returned to the mother was 220 million yuan (year-on-year + 120.1%, month-on-month-14.4%). The company's gross profit margin / net profit margin for the first three quarters was 43.0% pcts / net margin respectively (+ 8.4 pcts / net margin), and the gross margin / net profit margin for the third quarter was 43.7% / 30.5% respectively (year-on-year + 8.2 pound / net margin 10.6 pcts, quarter-on-quarter ratio-0.0max 1.3 pcts).
The price of silicon products fell slightly, and the production capacity of coupling agents contributed to profits. In terms of segment, the revenue of silicon products in the first three quarters was 1.05 billion yuan (year-on-year + 116.6%), production and sales volume were 62,000,000 tons (- 1.4% plus 3.3%) respectively, and the average price was 16378.9 yuan / ton (year-on-year + 109.6%). In the third quarter, the revenue of silicon series products was 360 million yuan (year-on-year + 50.5%, month-on-month-10.2%), production and sales volume were 2.0 / 23000 tons respectively (year-on-year-11.0% Universe 2.1%, month-on-month + 10.0% Universe 9.8%), and the average price was 15422.0 yuan / ton (year-on-year + 53.8%, month-on-month-18.3%). The production capacity of the newly built silane coupling agent is gradually released. In the first three quarters, the revenue of silane coupling agent products is 240 million yuan, the production and sales volume are 11.0 million tons respectively, and the average price is 28905.6 yuan / ton, which contributes to the increase of the company's performance.
Consolidate the leading position of trichlorosilicon in the world and expand the layout of new materials downstream. The company's main production capacity includes 65,000 tons of trichlorosilicon, 30,000 tons of high-purity silicon tetrachloride, 56,000 tons of potassium hydroxide and 100,000 tons of potassium sulfate. The projects of 50,000 tons / year trichlorosilicon and 20,000 tons / year silicon tetrachloride have been completed pending acceptance; the expansion of trichlorosilicon and silicon tetrachloride are under construction and are expected to be put into production at the beginning of 2023. The company announced in July 2022 that Sanfuxin Materials, a holding subsidiary, plans to invest 230 million yuan to build a new project with an annual production capacity of 30,000 tons of allyl chloride, which is mainly used for the production of silane coupling agents, which can increase the self-supply proportion of public raw materials and reduce the company's production costs and operating risks. The company actively distributes trichlorosilicon downstream electronic gases (electronic grade dichlorodihydrosilicon, electronic grade trichlorosilicon), silane coupling agent intermediates and series products, gaseous silicon dioxide and other downstream new material products, which can be grown in the future.
Risk hints: the risk that the production schedule of the new project is lower than expected, the risk that downstream demand is lower than expected, the decline in product prices is higher than expected, the competition among new entrants is intensified, and the risk of senior executives reducing their holdings.
Investment advice: downgrade earnings forecasts and maintain a "buy" rating.
The profit forecast is lowered, and the estimated 2022-2024 net profit is 852 million yuan (1.393 billion yuan), which is 31.1% higher than the same period last year. Diluted EPS=3.12/3.89/5.10 yuan, the current share price corresponds to PE=14/11/8x, maintaining the "buy" rating.
