Q3 may be a low point of performance, optimistic that the prosperity of the industrial silicon industry will rise, and maintain the "buy" rating company to release its report for the third quarter of 2022, with operating income of 18.275 billion yuan in the first three quarters, an increase of 29.09% over the same period last year, and a net profit of 4.554 billion yuan, down 9.17% from the same period last year. Of this total, 2022Q3 achieved a net profit of 1.009 billion yuan, down 61.62% from the same period last year and 32.42% from the previous month. Considering that 2022Q3's industrial silicon sales and silicone prices are lower than expected and the rapid release of polysilicon production capacity in 2023, we downgrade 2022 and raise our profit forecast for 2023-2024. the company's homing net profit in 2022-2024 is expected to be 62.18 (- 22.15), 116.03 (+ 7.51) and 131.01 (+ 914) million respectively. The EPS is 5.79,10.80,12.20 yuan respectively, and the current stock price corresponding to PE is 18.5,9.9,8.8 times.
We are optimistic that the prosperity of the industrial silicon industry will rise, and Q3 may maintain a "buy" rating for the company's low performance.
The decline in industrial silicon sales combined with a drop in silicone prices has led to pressure on the company's Q3 performance. According to the company's announcement, 2022Q3's industrial silicon and silicone sales were 11.54 and 161000 tons respectively, down 31.61% and 5.11% respectively compared with Q2. At the same time, according to Baichuan Yingfu data, the average tax price of 2022Q3 industrial silicon and silicone DMC is 19267 yuan and 19917 yuan per ton respectively, up 0.94% and 19.97% respectively compared with Q2. The decline in industrial silicon sales combined with a drop in silicone prices put pressure on the company's Q3 performance.
Silicone prices may have bottomed out, under the double support of supply and demand, industrial silicon prices are expected to be uplink organosilicon, according to Baichuan Yingfu data, as of late October domestic silicone DMC tax prices have fallen to 18000 yuan / ton, most production enterprises have been in a state of loss, silicone prices have a strong cost support. In terms of industrial silicon, the southwest region will enter a traditional dry period after November, when the shortage of hydropower supply may lead to a certain disturbance in the supply of industrial silicon. In this context, with the intensive production of 2022Q4 polysilicon and the gradual recovery of demand for organosilicon and silicon-aluminum alloy, the price of industrial silicon is expected to rise gradually. In addition, the company's "annual production capacity of 200000 tons of polysilicon project" and "annual production capacity of 3 million tons of photovoltaic glass project (in two phases)"
The polysilicon project is expected to start production in the first half of 2023, when it is expected to contribute key performance increments to the company.
Risk tips: capacity delivery process is not as expected, downstream demand has dropped sharply, domestic epidemic situation is repeated, and so on.