Incident: The company released its 2022 annual report, with revenue of 4.14 billion yuan in '22, +23% year on year; Guimu's net profit was 78 million yuan (slightly higher than the median performance forecast), -63.2% year on year. The company's 22Q4 revenue was 1.36 billion yuan, +30.6% month-on-month, +57.3% yoy; gross profit margin was 11.4%, -2.5pct month-on-month, +1.2pct year-on-year.
Comment: The results of cost control are obvious, increasing R&D and focusing on long-term development. The company's sales expense rate/management expense rate/R&D expense rate/financial expense ratio in '22 was 0.93%/3.03%/2.12%/0.88%, respectively. The year-on-year change was -0.20/-0.08/+0.65/-0.56pct. The total cost ratio of the four items was 6.96%, and the year-on-year rate was -0.19pct.
PV glass: 1) Full production and full sales, high revenue increase: in '22, the company's photovoltaic glass revenue was 2.010 billion yuan, +52.3% year on year; sales volume was 95.5 million square meters, +90.4% year on year; calculated average order price of 21.1 yuan, -5.3 yuan year on year; gross profit per square meter was 3.5 yuan, -3.1 yuan year on year. The company's photovoltaic glass was fully produced and sold out in '22. Sales increased as the Jiaozuo and Xuchang bases were put into operation, but the decline in photovoltaic glass prices and rising costs affected profit levels. 2) Large orders have been signed, and demand is full: The company has signed large orders with Jingao and Tianjin Huanrui. Effective production capacity was still increased in '23, and photovoltaic glass production and sales are expected to continue to rise high. 3) Expanding upstream and continuing to reduce costs: The company continues to promote the construction of silicon-based quartz sand processing projects, with a total production capacity of 750,000 tons/year. At the same time, the company has signed a framework cooperation agreement for quartz sand mining, taking multiple measures to guarantee the supply of raw materials and reduce costs.
Float glass: Increased capacity utilization, falling float prices, rising raw material costs, and discontinuous production are putting pressure on profits. In '22, the company's flotation revenue was 401 million yuan, +57.7% year on year; sales volume was 147,000 tons, +107% year on year; calculated the average price per ton was 2,761 yuan, the previous year was -863 yuan, and the gross profit per ton was 430 yuan, compared to -1203 yuan over the previous year. Affected by the decline in real estate, the price of float glass fell sharply, and the price of raw materials rose, leading to a decline in float gross margin. In terms of photothermal energy, the company received a 100MW order in '22, but due to its small scale and failure to achieve continuous production, its contribution to performance is not obvious. In the future, as the company's solar and thermal orders grow, the gross margin of the floating method business may improve.
Investment suggestions: The company is an established glass company with unique natural gas advantages. The rate of expansion of photovoltaic glass production is leading the way. At the same time, the diversification of high-end glass fields such as photothermal and pharmaceutical glass is progressing steadily. We expect the company's net profit to be 1.19/185/324 million yuan in 23-25, corresponding to EPS 0.11/0.17/0.30 yuan, maintaining the “increase in holdings” rating.
Risk warning: The industry has overcapacity, downstream demand has fallen beyond expectations, and raw material prices have risen above expectations.