Key points of investment
The market share of adhesive film products increased. The 23Q1 performance turned a month-on-month loss to a profit in 2022. The company achieved total operating income of 5.307 billion yuan, an increase of 70.90% over the previous year; net profit of 50 million yuan, a decrease of 80.14% over the previous year; net profit of non-Gimo was 28 million yuan, a decrease of 88.34% over the previous year. In the first quarter of 2023, the company achieved total operating income of 1,351 million yuan, an increase of 9.98% over the previous year; Guimu's net profit was 23 million yuan, a decrease of 70.56% over the previous year, turning a loss into a profit.
Shipments of photovoltaic film increased dramatically, and the profit level bottomed out. In 2022, the company's sales revenue of photovoltaic film products was 5.258 billion yuan, an increase of 72.28% over the previous year; sales volume reached 435 million square meters, an increase of 76.88% over the previous year. The increase in shipment volume led to a continuous increase in the company's market share; the average sales price was 12.09 yuan/square meter, a decrease of 2.60% over the previous year. The gross margin of photovoltaic film products fell 7.49 pcts to 7.43% year on year. The main reason is that since the third quarter, the price of the raw material EVA has fluctuated. The company needs to gradually absorb expensive inventories, and the profitability of film products has been under phased pressure. Since the first quarter of 2023, with the steady recovery in particle and adhesive film prices, film profitability has bottomed out.
Production capacity expansion plans are progressing one after another, and the product structure continues to be optimized
In 2022, the company's new production capacity was mainly focused on adhesive films used in combination with double glass modules and N-type battery modules. The product structure continued to be optimized, and the supply capacity of high-quality adhesive films increased steadily. In the first half of 2022, the company issued convertible bonds to build a 200 million square meter photovoltaic film project in Yancheng (phase I) (the project address was changed to Pinghu City, Jiaxing City) and the 150 million square meter photovoltaic packaging materials project in Shangrao (phase I). In 2023, the company plans to raise additional capital to build a 200 million square meter photovoltaic packaging material project in Zhenjiang (phase I) and a photovoltaic film project with an annual output of 200 million square meters in Shangrao (phase I).
New film product categories were added, focusing on promoting the growth of the automotive new materials market in the photovoltaic field. The company added a single-layer POE film category and new EXP film for TOPCON, improved EPE film, white co-extruded POE film for the lower layer of TOPCON, and new film products such as high-PID single-layer EVA film and HJT special phototransfer film. In the non-photovoltaic sector, the company added electronic functional films such as dimming films for smart glass for new energy vehicles, and PVE glass adhesive films for cooling and noise reduction, etc., and new environmentally friendly surface materials for smart car cockpits have also made good progress.
Profit forecasting and valuation
Lower the profit forecast and maintain the “buy” rating. The company is a high-quality supplier of photovoltaic film, and the continuous expansion of production capacity is expected to drive rapid growth in performance. Considering the insufficient upward transmission of photovoltaic film to upstream raw material costs (2023Q1EVA price up 34.0%, film price up 15.8% on average), we lowered the company's profit forecast. The company's net profit for 2023-2024 is estimated to be 515 million yuan and 750 million yuan respectively (777 million yuan and 983 million yuan before the reduction), adding to the 2025 profit forecast, the company's net profit to the mother in 2025 is estimated to be 952 million yuan, and the net profit of the company to the mother in 2023-2025 will increase 927.59% year-on-year, respectively. , 45.70%, and 26.95%. The corresponding EPS was 6.13, 8.93, and 11.33 yuan/share, respectively, and the corresponding PE was 20, 14, and 11 times, respectively. Maintain a “buy” rating.
Risk warning
Global PV installation demand fell short of expectations; raw material prices fluctuated; market competition intensified.