Net profit returned to the mother in '22 was 62 million yuan, maintaining the “increase in holdings” rating. In '22, the company achieved revenue of 537 million yuan (yoy -3.57%); net profit of the mother was 62 million yuan (yoy -546.95%). We updated the company's sales price, sales volume, cost and financial data based on the company's 22-year annual report. It is estimated that the company's net profit for 23-25 will be 0.16/0.44/051 million yuan. Using the segmented valuation method, since the price of germanium has rebounded to the December 21/March 22 level, the average PB value of the two-stage company was 5.08/5.77, and the average of the two was taken to give PB5.43X to the germanium resource business. Considering the relatively low assets of germanium components and semiconductor materials, the company estimated the market value corresponding to germanium resources of about 7.724 billion yuan using BPS2.18 yuan in '23. The net profit of germanium components and semiconductor materials in 23 was 0.12/04 million yuan. According to the comparable company Wind's unanimous expectations of an average PE (23E) of PE (23E), 31.1/44.2X was given, corresponding to a market capitalization of 541 million yuan, with a total market value of 8.265 billion yuan and a target price of 12.66 yuan, maintaining the increase in holdings rating.
The impact of rising germanium prices is difficult to offset the impact of declining sales. The company's revenue in '22 was under pressure, and the price of germanium products continued to rise in '22. Among them, the average price of germanium material-grade products (lens blanks) increased 15.23%, and the average price of fiber-grade germanium products increased 29.82% over the same period last year; the total revenue contribution was +28 million yuan over the same period last year; the company's sales of germanium products declined, leading to a year-on-year revenue of -48 million yuan. The impact of rising germanium prices is difficult to offset the impact of declining sales. The company's revenue in '22 was under pressure, -3.57% year on year; on the cost side, the company's operating costs increased 6.08% in '22, mainly due to rising unit costs and falling sales of some major products.
As a result, gross margin fell 8.05pct to 11.53%.
Technical indicators have further improved and market demand has risen. In 22 years, sales of compound semiconductor products have been impressive. The company's material-grade germanium products, photovoltaic-grade germanium products, infrared germanium products (blank and coated lenses), infrared germanium products (lenses, optical systems), and fiber-grade germanium products achieved sales of 30.73 tons, 205,800 pieces, 5.53 tons, 2,608 pieces (sets) and 29.02 tons, compared to -9.07%/-24.29%/-0.52%/-4.04% of compound semiconductor products; however, compound semiconductor products sold significantly + +++-4.04% 35.14% to 92,200 tablets, mainly due to the further improvement in product technical indicators in '22, combined with increased market demand, which increased sales of gallium arsenide products and indium phosphate products by 42.03% and 15.68% year-on-year.
Short-term production plans are active, and long-term transformation and upgrading can be expected
In '23, the company formulated an active production plan. It plans to produce 52 tons of material-grade germanium products; 4.50 tons of infrared-grade germanium products; 4,400 infrared lenses and optical systems (sets). The product structure is skewed towards lenses and optical systems with high technical content and high added value; 280,000 photovoltaic-grade germanium products; 34 tons of fiber-grade germanium products; 160,000 gallium arsenide wafers; 50,000 indium phosphate chips. The production scale may expand significantly. The company adheres to the concept of “technology first”, and all elements are skewed towards scientific and technological innovation. In addition to speeding up the rise in production of existing high-end products, the company will also accelerate transformation and upgrading to further promote the cultivation of a series of high-end products such as large-size, low-misaligned solar germanium monocrystals, high-quality gallium arsenide chips, and indium phosphate chips.
Risk warning: production falls short of expectations, downstream demand falls short of expectations, etc.