The 20H1 net profit of the company increased by 173.34% over the same period last year, while the revenue of the holding rating company 20H1 reached 357 million yuan, an increase of 55.26% over the same period last year; the net profit of homing was 6 million yuan, an increase of 173.34% over the same period last year; and the net profit of homing in the second quarter was 4.8 million yuan, an increase of 152.72% over the same period last year and 291.78% from the previous quarter. The company's product structure has been continuously optimized, sales of infrared grade germanium products and semiconductor materials with high gross margin have increased and gross profit margin has increased. We estimate that the 20-22 net return profit of the company will be 0.64 pound 0.27 million, corresponding to an EPS of 0.1max, 0.41, respectively, maintaining the overweight rating.
The company's photovoltaic grade germanium products and semiconductor materials showed an upward trend in volume and price. Sales of 20H1 infrared grade germanium products, photovoltaic grade germanium products and semiconductor materials increased by 21.58%, 621.01% and 110.55% respectively compared with the same period last year, while sales of material grade and optical fiber grade germanium products decreased by 11.33% and 7.64%. In addition, the prices of photovoltaic grade germanium products and semiconductor materials increased by 4.19% and 184.03% respectively compared with the same period last year; the increase in the price of semiconductor materials was mainly due to changes in product varieties and specifications; while the prices of material grade and optical fiber grade germanium products decreased by 10.89% and 19.25% respectively.
There is room for improvement in the capacity utilization of the company's high gross profit margin products such as semiconductor materials. According to 20H1, the capacity utilization of germanium materials is about 75.17%, while photovoltaic germanium products have been overproduced; while the capacity utilization of infrared germanium products, optical germanium lenses, optical fiber germanium products and semiconductor materials is still low, 29.41%, 23.93% and 25.93%, respectively. According to 19.9 Huatai Nonferrous "keep germanium, power second-generation semiconductor materials", the annual demand growth rate of germanium in 19-21 is about 4.6%, and the price is expected to rise, while the localization of semiconductor materials such as gallium arsenide and indium phosphide is expected to accelerate. Therefore, we believe that the capacity utilization of high gross margin products such as germanium materials (gross margin 17.84%) and semiconductor materials (gross margin 22.20%) is expected to continue to increase, which will help the company's future performance growth.
The company's product structure has been optimized and the proportion of revenue from high gross profit margin products has increased. 20H1's products with high gross profit margin are mainly infrared germanium products and semiconductor materials, with gross profit margins of 31.69% and 22.2% respectively, an increase of 12.77% and 65.39% respectively, significantly higher than the company's comprehensive gross profit margin level of 13.38%. The proportion of revenue from 20H1's two businesses reached 22.72%, which was higher than that of 19H1's 16.73%. In addition, sales of photovoltaic germanium products used in aerospace increased by 621.01%, while its gross profit margin also benefited from a price increase of 35.94% to 8.98%. The revenue share of this business increased to 20.88%, significantly higher than the 4.32% of 19H1.
20H1 optimizes its product structure and maintains its overweight rating.
The product structure of 20H1 company is optimized, and the net profit of returning home for 20-22 years is 0.64 plus 1.31 / 270 million yuan. Using the segment valuation method, according to Wind, the current germanium ingot price has risen to the level of 2017Q1 and 2012Q1, but it is still at the low level of nearly 10 years; the low value of PB of the two-stage company is 4.28,3.37 respectively, and the average PB of the past 10 years is 5.55; we raise the PB valuation of germanium resources from the original 2.22.3 to 3; 20 years of company BVPS forecast value of 2.28yuan, corresponding to the market value of 4.467 billion. The 20-year corresponding net profits of germanium components and semiconductor materials are 20 million and 37 million respectively, and the 20-year average PE valuation of comparable companies is 66.65 times and 135.19 times respectively, with a corresponding market capitalization of 6.335 billion. The company's target price is 16.54 yuan (the previous value is 9.96-10.4 yuan) to maintain the overweight rating.
Risk tips: germanium prices fall; 5G and other downstream development is not as expected; gallium arsenide second-generation semiconductor materials engineering progress is not as expected.
