The company released its three-quarter report for 2022, with revenue of 18.275 billion yuan in the first three quarters, an increase of 29.09% over the same period last year, and net profit of 4.554 billion yuan, down 9.17% from the same period last year. Of this total, Q3 realized revenue of 5.276 billion yuan, down 17.74% from the same period last year and 20.19% from the previous year; the net profit from its mother was 1.009 billion yuan, down 61.62% from the same period last year and 32.42% from the previous year. The main factors are: (1) the downstream demand of industrial silicon affected by the epidemic is weak and the logistics and transportation is not smooth, and the sales volume is declining; (2) the terminal demand of silicone shrinks, and the price continues to decline; (3) the R & D cost increases greatly, and the performance is slightly lower than expected.
Silicone prices fell in the third quarter due to shrinking terminal demand. Affected by the epidemic and other factors, the downstream terminal demand of organosilicon shrinks, at the same time, the monomer production capacity of the supply side is released rapidly, and the price of organosilicon is under pressure. According to the company's announced operating data, the overall sales of organosilicon in the third quarter reached 161000 tons, an increase of 5.11% over the previous quarter. The average price of organosilicon in the third quarter was 18138.02 yuan / ton, down 32.01% from the second quarter, resulting in pressure on the company's silicone plate. At present, the terminal demand for organosilicon is still weak, and it is expected that the price of organosilicon will still be in the low operating range in the short term, but 200000 tons of siloxane in Shanshan Phase III and downstream deep processing Q4 will be gradually put into production, and the silicone plate is expected to pay the price in quantity.
Industrial silicon sales declined due to the epidemic and other factors. According to the company announcement, the sales volume of industrial silicon reached 115400 tons in the third quarter, down 31.61% from the previous quarter. The average price of industrial silicon in the third quarter was 16571.85 yuan / ton, down 1.83% from the previous quarter, mainly due to the impact of the epidemic in the third quarter. Silicone, aluminum alloy and other downstream demand is weak, superimposed logistics control is strict, the transportation of products and raw materials is affected, resulting in a decline in industrial silicon sales, the company's industrial silicon sector profits are under pressure. With the improvement of the epidemic situation, the repair of demand for organosilicon and other industries downstream, and the approach of the dry season in the fourth quarter, the price of industrial silicon is expected to enter the upstream channel. At the same time, the 400000 ton industrial silicon project in Shanshan Phase II is expected to gradually reach production. Yunnan Hydropower Silicon Recycling economy Project Phase I 380000 tons of industrial silicon is expected to be gradually put into production at the beginning of 2023, and the company's industrial silicon plate is expected to see both volume and price rise.
Adjust the profit forecast, maintain the buying rating: affected by the epidemic and other factors, silicone prices are under overall pressure in the third quarter, and industrial silicon sales declined. We downgrade our profit forecast. It is estimated that the net profit of homing in 2022-2024 will be 62.09 million yuan (originally 85.71x93.59 billion yuan), corresponding to 19x, 14x and 11x respectively, maintaining the "buy" rating. Maintain the target price to $152.48.
Risk tips: product prices fall; capacity expansion is not as expected; demand decline risk