Main points of investment
Event: the company released its 2023 semi-annual report on August 21.
2023H1 achieved revenue of 1.45 billion, year-on-year + 150.2%: home net profit of 410 million, year-on-year + 342.8%. Of these, 2023Q2's revenue is 820 million, compared with the same month-on-month ratio, the net profit is + 161.6%, 28.7%, 240 million, and + 389.0%, 37.0%, respectively.
The quartz crucible business has increased rapidly, the superimposed cost management has been optimized, and the profit has been continuously improved. The revenue of quartz crucible and photovoltaic processing service of 2023H1 company is 9400.46 million yuan respectively, and the revenue of quartz crucible and photovoltaic matching processing service is + 242.2% and 74.63% respectively compared with the same period last year. 2023H1's gross profit margin and net profit margin are 36.0% and 28.0% respectively, and + 9.6pcts/+12.2pcts respectively compared with the same period last year. The overall decline in the four expense rates of 1.82pcts, effectively improve the profitability of the company.
Cash flow: 2023H1's net operating cash flow was 120 million, which was + 260.2% compared with the same period last year, mainly due to the increase in income.
With the upgrading of superimposed products with high prosperity in the industry, quartz crucibles are expected to rise in volume and profit.
① according to CPIA data, the main industry chain of 2023H1 photovoltaic: the output of silicon material, silicon wafer, battery wafer and module exceeds 600000 t, 250GW, 220GW and 200GW respectively, of which silicon wafer increases by more than 63% over the same period last year. The high prosperity of the industry directly drives the rapid growth of the auxiliary materials industry.
② photovoltaic has entered the N-type era. According to CPIA data, it is predicted that the proportion of N-type silicon wafers will increase from 10% in 2022 to about 25% in 2023. The service life of the quartz crucible corresponding to the N-type silicon wafer is 50-100 hours lower than that of the P-type, which will aggravate the shortage of high-quality quartz crucible and help to maintain the profit level of quartz crucible products.
③ raised investment and expanded production, and the products continued to upgrade. The company plans to issue convertible bonds to raise no more than 470 million yuan to invest in the first / second phase of the quartz crucible project in Ningxia, in which 8 quartz crucible production lines are built in the first phase and 10 production lines are built in the second phase, with an annual production capacity of 10,000. The fundraising projects are 36-inch photovoltaic quartz crucibles and 28-inch semiconductor quartz crucibles (32-inch photovoltaic quartz crucibles and 16-32-inch semiconductor quartz crucibles). The large size of photovoltaic quartz crucible is helpful to increase the quantity and profit.
Profit forecast and investment rating:
We forecast that the company's revenue from 2023 to 2025 will be 3.98 trillion yuan, the net profit from its mother will be 1.22 billion yuan, and the corresponding PE will be twice that of 10-8-7. It will be covered for the first time and given a "buy" rating.
Risk Tips:
The risk of capacity construction is less than expected; the risk that photovoltaic demand is lower than expected; the risk of raw material price fluctuation; the risk that the information and data used in research and report are not updated in time.