Core viewpoints

Sanfu shares achieved operating income of 2.648 billion in 2022, + 65.6% of the same period last year, and net profit of 748 million yuan, + 123.1% of the same period last year. The rise in international energy prices in 2022 superimposed the domestic "double carbon" policy, and the downstream photovoltaic industry was booming, promoting the production and sales of the company's silicon-based products. The project with an annual output of 50,000 tons of trichlorosilicon and a series of silane coupling agent products with an annual capacity of 73000 tons were successfully started during the reporting period and entered the stage of trial production, with steady progress in the construction and planning projects.

Event

The company released the 2022 annual report: in 2022, the company realized operating income of 2.648 billion yuan, + 65.6% year-on-year; net profit of 748 million yuan, + 123.1%; and non-return net profit of 737 million yuan, + 122.4% of the same period last year. In the single quarter of 2022Q4, the company achieved operating income of 595 million yuan, year-on-year + 27.4%, month-on-month-16.6%; net profit of 125 million yuan, + 40.9%, month-on-month-42.6%.

Brief comment

Trichlorosilicon support performance, silane coupling agent to open up the market. In 2022, the company realized operating income of 2.648 billion yuan, + 65.6% compared with the same period last year, and realized net profit of 748 million yuan, + 123.1% over the same period last year. In terms of silicon products, the rise in international energy prices in 2022 superimposed the domestic "double carbon" policy, promoting the uptrend of the photovoltaic industry and creating a greater demand for raw materials such as trichlorosilicon and high-purity silicon tetrachloride. The company achieved revenue of 1.353 billion, a year-on-year increase of 93.2%, a gross profit margin of 60.3%, and an increase of 17.1 pct. In terms of potassium series products, the market shows a steady development trend. In 2022, the company seized the development opportunity of the European market to create export increments of potassium series products, achieving revenue of 830 million, an increase of 9.8% over the same period last year, and a gross profit margin of 18.7%, down 8.0% from the same period last year. In terms of silane coupling agents, the company's silane coupling agent phase II "annual production of 73000 tons of silane coupling agent series project" has entered trial production in 2022 and will enter formal production in the first half of 2023. Silane coupling agents achieve revenue of 313 million in 2022, with a gross profit margin of 17.3%. As the production capacity of silane coupling agents is gradually climbing, it is expected to occupy a larger market share in the future.

The steady development of electronic grade products, the layout of electronic grade silicon tetrachloride. In 2022, the production of two kinds of electronic products is safe and stable, and the market continues to open up. Electronic grade trichlorosilicon products, has achieved stable supply to 6-8 inch silicon epitaxial wafer, silicon carbide manufacturers, and passed the on-line test of 12-inch silicon wafer leading production enterprises; electronic grade dichloride silicon products, 2022 to achieve a stable supply to the domestic leading storage manufacturers, logic chip Fab manufacturers, the existing batch supply of more than 10 customers, the company will continue to promote customer certification and testing at home and abroad. Based on the existing industrial chain and electronic product research and development experience, the company actively arranges electronic-grade silicon tetrachloride projects to enrich the company's electronic-grade product categories. With the gradual progress of the company's electronic-level projects, it is expected to further improve profitability.

Steady progress in construction and planning projects to support the company's long-term growth. In November 2022, the company successfully started its "trichlorosilicon project with an annual output of 50,000 tons" and successfully entered the trial production stage. The construction of the "trichlorosilicon project with an annual output of 72200 tons" is expected to be completed in the first half of 2023. The new project realizes the flexible adjustment of the output ratio of photovoltaic grade trichlorosilicon to ordinary grade trichlorosilicon, and the existing production line forms a system, which can realize the flexible adjustment of the output ratio of trichlorosilicon to silicon tetrachloride, which is helpful for the company to optimize production decision-making. improve risk resistance; silane coupling agent phase II "annual output of 73000 tons of silane coupling agent series product project" entered the trial production stage in 2022 and is expected to be formally put into production in the first half of 2023. The sufficient and steady progress of the company's construction and planning projects will provide support for the company's long-term growth.

Profit forecast and valuation: the company's 2023-2025 net profit is expected to be 750 million, 980 million and 1.22 billion respectively, EPS 2.75,3.59 and 4.46 yuan respectively, corresponding to PE 12.5x, 9.6x and 7.7x respectively, maintaining the "buy" rating.

Risk tips: (1) Macro-economic fluctuation risk: the company's main products and national production and life, macroeconomic correlation is high, macroeconomic fluctuations will affect the prosperity of the industrial chain. (2) the product demand of the industrial chain is lower than expected: when the demand of the industrial chain as a whole or some links is weak, the overall profit may be affected. (3) the application expansion of downstream high-end new products is not as expected: the company has more high value-added products and more room for expansion in emerging fields. if the application expansion of downstream high-end new products is slow, it will have a negative impact on the long-term growth of the industry. (4) the company's new capacity construction is not as expected: if the new capacity construction is not as expected, it will affect the growth of the company's operating scale.