2023Q2's homing net profit decreased by 22.25% compared with the previous month, which is optimistic about the extension potential of the company's industrial chain.
The company released its semi-annual report in 2023, with operating income of 11.938 billion yuan, down 8.17% from the same period last year, and net profit of 1.782 billion yuan, down 49.71% from the same period last year. Of this total, 2023Q2 achieved revenue of 6.209 billion yuan, an increase of 8.38% over the previous month, and a net profit of 780 million yuan, down 22.25% from the previous month. Considering that the price of industrial silicon, organosilicon and polysilicon fell more than expected, we lowered our profit forecast for 2023-2025. It is estimated that the return net profit of the company from 2023 to 2025 is 28.64,39.13,51.03 (- 40.09) million yuan respectively, and the EPS is 2.42,3.31,4.32 (- 3.39) yuan respectively. The current share price corresponds to 25.7,18.8,14.4 times of PE respectively. We are optimistic about the potential of the company as the domestic industrial silicon and silicone leader to extend downstream photovoltaic and other industrial chains, and maintain the "buy" rating.
The price of 2023H1 industrial silicon and organosilicon increased and decreased, resulting in the company's performance under pressure. 2023H1's industrial silicon and silicone sales were 42.15 and 345700 tons respectively, which were + 26.92% and + 31.36% respectively compared with the same period last year, of which 2023Q2 sales were 24.08 and 185400 tons respectively.
In terms of price, according to Baichuan Yingfu data, affected by the weak demand downstream and the release of new production capacity, the average prices of 2023H1 industrial silicon and silicone DMC are 16229 yuan / ton and 15883 yuan / ton, respectively, compared with the same period last year. The average price of 2023Q2 is 14810 yuan / ton, 14789 yuan / ton,-16.19% and-12.98%, respectively. At present, the prices of industrial silicon and organosilicon have fallen below the break-even line of the industry, most of the production enterprises are in a state of loss, and the cost end support is strong. In the future, with the recovery of the domestic economy, the profits of industrial silicon and silicone are expected to be repaired gradually.
The photovoltaic industry chain project is progressing steadily, and the integrated layout is expected to contribute important performance increments to the company. According to the company announcement, the company's subsidiary Central Hesheng's annual output of 200000 tons of high-purity polysilicon project and Eastern Hesheng's annual production of 200000 tons of high-purity polysilicon project are expected to be put into production in 2023Q3 and 2024Q1 respectively. At the same time, the company's annual 20GW photovoltaic module project and 1.5 million tons of new energy equipment for ultra-thin high-transmittance photovoltaic glass manufacturing projects are also expected to be put into production in 2023Q4 and 2023Q3 respectively. In addition, through the R & D and manufacturing of the third generation semiconductor industry of Hesheng New Materials layout, the company has passed the acceptance and mass production capacity of the industrialization production line project of 20,000 wide band gap semiconductor silicon carbide substrates and epitaxial wafers, and the products have also received positive feedback from the market. The company continues to accelerate the pace of photovoltaic and other downstream industrial chain extension, and is expected to contribute important performance increments for itself in the future.
Risk tips: project production is not as expected, downstream demand is not as expected, raw material prices fluctuate greatly, and so on.