Event

The company's 23H1 achieved revenue of 1.455 billion, an increase of 150.19% over the same period last year, and a net profit of 408 million, an increase of 342.85% over the same period last year. Of this total, 23Q2 achieved revenue of 818 million, an increase of 161.6 percent over the same period last year, an increase of 28.7 percent, and a net profit of 236 million, an increase of 389.04 percent and 37 percent over the same period last year.

The quantity and price of quartz crucible are rising, and the profitability is on the rise.

23H1 realized quartz crucible income of 936 million yuan, an increase of 242.23% over the same period last year, and a gross profit margin of 45.36%, an increase of 8.25pct over the same period last year. We judge that it is mainly due to the increase in crucible capacity while the price increases with the price of high-purity quartz sand. 23H1 realized photovoltaic processing income of 460 million yuan, an increase of 74.63% over the same period last year, and a gross profit margin of 20.5%, an increase of 1.98pct over the same period last year.

In terms of costs, with the expansion of the scale, the expense rate further declined during the period, among which the management and R & D expenditure rates respectively declined 0.98/0.91pct compared with the same period last year. In terms of profitability, the overall gross profit margin of H1 in 23 years was 36%, an increase of 9.58 pct over the same period last year; the overall net profit margin was 28.04%, an increase of 12.2pct over the same period last year.

In the first half of 23, the company's sales to its largest customers accounted for 90.53% of its operating revenue, an increase over the whole of last year.

Issue convertible bonds, further increase production capacity

The company issued convertible bonds to raise 470 million yuan to build a new quartz crucible production line, including 8 production lines (150 million yuan) in the first phase and 10 production lines (285 million yuan) in the second phase, with a total production capacity of 180000 quartz crucibles. The first phase is mainly 36-and 28-inch crucibles, and the second phase is mainly 36-inch crucibles. The construction period of the first phase of Ningxia quartz crucible project is 2 years. In the future, with the release of large-size crucible capacity, gross profit margin is expected to remain high.

Profit forecast and investment suggestion

Photovoltaic continues to be high, the price of high-purity quartz sand has increased greatly this year, and the company still has plans to expand production in the medium and long term, so we raise the company's profit forecast. We estimate that the company's homing net profit for 2023-2025 will be 1.16 billion yuan, 1.49 billion yuan (the previous value is 9.2, 1.18 billion yuan, 14.10 billion yuan), a year-on-year growth rate of 387 percent, 28 percent, 1.3%, and maintain the "buy" rating.

Risk tips: lower-than-expected demand downstream, higher-than-expected price increases in upstream raw materials, and higher-than-expected progress in new technologies of raw materials.