Core views:
Incident: The company released its semi-annual report for 2023. 23H1 company's revenue was 3,715 million yuan, -0.29% year on year, 261 million yuan, -28.52% year on year; 23Q2's revenue was 1,810 million yuan, -6.85% year on year, and net profit of 173 million yuan, or -21.30% year on year.
The price of 23H1 soda ash fluctuated widely, and the float glass boom picked up. By sector, the company's 23H1 glass segment had revenue of 2,356 million yuan, net profit of 3.47 million yuan, soda ash revenue of 1,993 million yuan, and net profit of 278 million yuan. The main contribution to the company's profit in the first half of the year came from the booming soda ash business. According to Wind and Zhuochuang Information, the average price of 23H1 soda ash was over 2,600 yuan/ton, which is at a high level in the past 5 years. The price of 23H1 soda ash fluctuated widely. The price difference between high and low points exceeded 1,000 yuan/ton, and the January-April price was running at a high level of more than 2,700 yuan/ton. Since May, it has been affected by industrial sentiment (Yuanxing Energy's new supply expectations compounded by downstream enterprises reducing the inventory of soda ash raw materials). Prices fell rapidly, and the average price in June fell to around 2,000 yuan/ton. In the first half of the year, float glass benefited from real estate insurance delivery and supply contraction, and industry profits have picked up rapidly since April.
Continue to promote the high-end glass industry and focus on green energy. The high-end of the company's products mainly consists of photovoltaic glass that combines crystalline silicon modules as well as thin films and perovskite components, and the photovoltaic glass business has become a new growth pole. According to the company's financial report, (1) rolled glass at the Ningxia base: based on process improvements, the yield of the original film increased significantly and stabilized at 82%-85%; 23H1 Ningxia subsidiary achieved net profit of 13.3 million yuan; (2) thin film module backboard: the Malay base production line was ignited in January '22, has stable supply, and the second phase of the project was put into operation in May '23; 23H1's Malaysian subsidiary achieved net profit of 25.24 million yuan; (3) TCO glass: TCO glass: TCO glass: TCO glass: TCO, which has the capability of a pilot line in China, has confirmed TCO's product performance. and established a business The relationship is waiting for demand to increase.
Profit forecast and investment suggestions: The company's EPS in 2023-2025 is expected to be 0.47/0.64/0.81 yuan/share, and the corresponding PE valuation is 15.7/11.5/9.2 times. Referring to comparable companies, give the company 25x PE in 2023, corresponding to a reasonable value of 11.81 yuan/share, and give it a “buy” rating.
Risk warning: Real estate has declined sharply, expectations for photovoltaic installations are low, and raw fuel prices have risen sharply.