Event: the company issued a performance forecast for 2022, which is expected to achieve a net profit of 65 million yuan to 85 million yuan, a decrease of 124.8176 million yuan to 144.8176 million yuan compared with the same period last year, a decrease of 59.49% to 69.02% compared with the same period last year. It is estimated that the net profit of non-return will be deducted from 4000 yuan to 6000 yuan, a decrease of 11243.59 yuan to 13243.59 yuan compared with the same period last year, a decrease of 65.20% to 76.80%.

In a single quarter, Q4 is expected to achieve a net profit of-38.35 million yuan to-18.35 million yuan in 2022, 3.178 million yuan in 2021,-52.04 million yuan to-32.04 million yuan in 2022, and 2.89 million yuan in 2021.

The combination of multiple factors has led to a decline in profits in 22 years, and may be light in 23 years:

The profit decline of Q4 company in the past 22 years was caused by many factors: 1) under the influence of impairment provision and accounting standards, the amount of assets seized in the precious metal case of the company is expected to be recovered (the asset is the recovery of the company's creditor's rights), the impairment loss is about 23 million yuan, and Jiaozuo Ancai and Xuchang Ancai reached production one after another during the reporting period, and the company's daily melting volume of photovoltaic glass expanded from 900t/D to 2600t/D. Due to the increase in sales revenue resulting in an increase in accounts receivable at the end of the period, the corresponding increase in the amount of impairment loss is expected to be greater than that in precious metal cases. 2) the price of photovoltaic glass in the fourth quarter was lower than that in the same period last year, while the cost of raw materials was high. In terms of price, according to our statistics, the average price of Q4 camera 3.2mm camera 2.0mm coated photovoltaic glass in 2022 is 27.38 yuan / 20.54 yuan per square meter, which is 1.26% higher than that in the third quarter of 2022, and-1.39% 3.78% in the same period last year. On the cost side, according to our statistics, the factory price of Q4 LNG in 2022 is + 0.26% compared with Q3, compared with the same period last year and + 5.21% compared with the same period last year. In terms of heavy soda ash prices, the overall average price this year is high, compared with the same period last year + 15.42%. Under the combined influence of high cost and low price, as well as the background of expanding production and marketing of the company, the profitability of photovoltaic glass business has declined in the short term. 3) in the float glass business, the gross profit of the company's float glass business accounted for about 16.60% of the company's gross profit in 21 years. Affected by the epidemic and the depression of the downstream business, the average price of 22Q4 float glass is-3.31% higher than that of 22Q3 and-32.05% higher than that of 21Q4. Under the background of declining demand, the operating profit of float business decreased. 4) the company set up Henan Ancai Glass Research Institute, and during the reporting period, the R & D expenses of photovoltaic glass, photothermal glass and medicinal glass increased greatly compared with the same period last year.

Earnings forecast, valuation and rating: the 22-year performance is lower than expected due to the combination of multiple factors. We adjust the 2022max 2023 EPS forecast to 0.07pm 0.24max 0.40 yuan in 2024 (formerly 0.27pm 0.44max 0.64 yuan). The company's photovoltaic glass expansion path is clear, strong technical strength continues to cultivate new growth poles, and the fixed growth has been on the ground. we believe that 23 years after the asset impairment is sufficient, the company will be light. Maintain the "overweight" rating.

Risk tips: photovoltaic glass production expansion is not as expected, the cost of raw materials remains high.