Event: according to the company's quarterly report for 22 years, Q1-Q3 achieved operating income of 18.275 billion yuan, + 29.09% year-on-year, and net profit of 4.554 billion yuan,-9.17%, of which Q3 realized operating income of 5.276 billion yuan in a single quarter,-17.74% year-on-year and-20.18% month-on-quarter; net profit of 1.009 billion yuan, 61.62% and-32.46% respectively. 22Q3 single-quarter gross margin 36.63%, year-on-year-18.41pct, month-on-month + 0.67pct.
22Q3's revenue and profitability are under periodic pressure. 1) Q3 logistics was blocked, and the company's industrial silicon sales declined compared with the same period last year. Q3 company industrial silicon sales year-on-year-28.60%, month-on-month-31.61%; sales average price + 2.59% year-on-year, basically flat, industrial silicon revenue of 1.912 billion yuan, year-on-year-26.75%, month-on-month-32.86%. 2) the downstream demand is weak and the price of silicone is under pressure. With the expansion of silicone production capacity, the sales volume of 110 raw rubber / 107 rubber / cyclic siloxane / mixed rubber was + 34.74% / + 18.19% compared with the same period last year, and the corresponding average sales prices were-47.66%, 40.32%, 38.05%, 34.18% respectively, compared with the same period last year.
In the short and medium term, the supply side of industrial silicon and organosilicon industry is the dominant variable of price. Due to the limited supply in the main producing areas and the push up of industrial silicon prices, according to the month of iFinD,10, industrial silicon prices rose slightly compared with the previous month, and silicon prices are expected to run smoothly; the operating rate continued to decline due to serious losses in the silicone industry, and prices rose slightly in October, but the imbalance between supply and demand still needs a long time to repair, we judge that silicone prices are still in the bottoming stage. As of 22H1, the company has 790,000 tons / year industrial silicon production capacity, under construction projects: East Hesheng Phase II 400,000 tons / year industrial silicon project, Yunnan Hesheng Phase I 800,000 tons / year industrial silicon project; the company already has organic silicon monomer production capacity of 1.33 million tons / year, Xinjiang second phase 200,000 tons / year siloxane project trial operation phase, third phase 200,000 tons / year siloxane production capacity under construction; Xinjiang 200,000 tons / year polysilicon production capacity is under construction. For a long time, in the competition of capacity expansion, the company, as the industry leader, not only benefits from the market volume and price growth, but also strengthens the industrial chain to tamp the cost advantage in the bottom period, but also enough to ensure its relative profit space.
Investment suggestion: due to the limitation of production and marketing of industrial silicon in the short term and the low price of silicone, we downgrade our profit forecast for 22-24 years. The net profit for 22-24 years is 61.00 pesos, respectively, and the corresponding PE is 17.2, 12.6 and 9.8x respectively. Maintain a "buy" rating.
Risk tips: raw material prices fluctuate, downstream demand is lower than expected, and capacity release is lower than expected.