Main points of investment
Polysilicon prices fell and profitability declined, actively promoting a month-on-month increase in sales and shipments. 2023H1 achieved a revenue of 9.325 billion yuan, down 42.93% from the same period last year, and its net profit was 4.426 billion yuan, down 53.53% from the same period last year, with a gross profit margin of 57.67% and a net profit rate of 47.47%. 2023Q2 realized revenue of 4.468 billion yuan, down 45.58% from the same period last year, 7.99% from the previous month; net profit from the home was 1.515 billion yuan, down 70.94% from the same period last year; 47.95% from the previous year; realized gross profit margin of 41.90%, decreased 30.27pcts from the previous month; realized net profit rate of 33.91%; decreased 26.03pcts from the previous month. The company's performance dropped significantly because in the first half of 2023, the impact of periodic inventory consumption superimposed on new production capacity in the industry was released one after another, and the domestic polysilicon supply increased significantly, which led to a rapid decline in polysilicon prices.
Orderly release of new production capacity, active sales of warehouses to promote significant increase in shipments 2023H1 achieved polysilicon production of 79200 tons, an increase of 18.66% over the same period last year, accounting for 12.15% of domestic polysilicon production, of which Q2 was 45300 tons, an increase of 33.85% compared with the previous month; sales volume reached 76800 tons, an increase of 0.59% over the same period last year, of which Q2 was 51500 tons, an increase of 103.89%. The high month-on-month increase in shipments in the second quarter is mainly due to 1) the orderly release of 100000 tons of production capacity in Inner Mongolia; 2) increase sales efforts and actively digest inventory. On the price side, the average selling price of polysilicon of 2023H1 Company was 1205 million yuan / ton, down 43.44% from the same period last year, of which 2023Q2 was 864 million yuan / ton, down 54.65% from the previous month. On the cost side, the average cost of sales of polysilicon from 2023H1 was 514,000 yuan / ton, down 18.66% from the same period last year, of which 2023Q2 was 503000 yuan / ton, down 5.82% from the previous month. 2023H1, the cash per unit was about 451,000 yuan / ton, down 22.07% from the same period last year, of which Q2 was 441,000 yuan / ton, down 6.11% from the previous month.
Production targets continue to advance, semiconductor, N-type silicon technology leading as of 2023H1, the company's total production capacity of 205,000 tons / year, Baotou Phase I polysilicon project main body construction completed, the project has reached production, the second phase of 100000 tons polysilicon project is expected to be put into production in 2023Q4, capacity construction continues to advance, the company is expected to have a nominal capacity of 305000 tons by the end of 2023, according to the company's estimate. The annual output in 2023 is expected to reach 19.3-198000 tons (of which 23Q3 output is 5.5-57000 tons). In addition, the company's 1000 ton semiconductor silicon project is expected to be put into production in 2023Q3. After the completion of the project, the company will further expand the company's business areas and improve the business layout of the industrial chain. At the same time, the company has achieved mass sales of N-type silicon. With the transition of the industry to the next generation of N-type technology, the sales premium of N-type polysilicon has expanded, which is expected to contribute new profit growth points for the company.
Profit forecast and valuation
Downgrade earnings forecast and maintain "buy" rating. The company is a leading company in the field of polysilicon, with N-type and semiconductor products leading in technology. Taking into account the significant decline in polysilicon prices during the reporting period, we downgrade the company's profit forecast. It is estimated that the return net profit from 2023 to 2025 will be 60.30,41.00 and 5.823 billion yuan respectively, corresponding to EPS 2.82,1.92,2.72 yuan per share, and corresponding PE to 14,21 and 15 times respectively. Taking into account the price decline, we downgrade the company's profit forecast, but for the consideration of the company's size advantage and leading technology. Maintain a "buy" rating.
Risk tips: capacity expansion is not as expected; downstream demand is not as expected; product prices fluctuate sharply.