Brief comment on performance

On October 25, 2023, the company disclosed that its revenue in the first three quarters was 5.804 billion yuan, an increase of 2.14% over the same period last year, and its net profit was 423 million yuan, an increase of 1.82% over the same period last year. Of this total, the revenue in the third quarter was 2.09 billion yuan, an increase of 6.76% over the same period last year, and the net profit was 162 million yuan, an increase of 224.39% over the same period last year.

Business analysis

Q3 soda ash profit slightly exceeded expectations, recent inventory cumulative prices under pressure: due to the release of new capacity in the third quarter, as well as the impact of some capacity overhaul, soda ash prices slightly exceeded expectations. Since late September, soda ash stocks have gradually accumulated and prices have been reduced one after another. recently, the price of heavy alkali has dropped to less than 2500 yuan / ton, about 1000 yuan / ton lower than the peak in August. It is expected that the profitability of soda ash will be under some pressure in the future.

The demand for real estate has picked up somewhat, and the profit of float glass has improved significantly: the demand for real estate in the lower reaches of the third quarter has picked up, superimposed by the factors of the traditional peak sales season, and the price of float glass has gradually rebounded, driving the company's float glass business revenue and profits to improve significantly compared with the same period last year. Taking into account the recent low level of industry inventory, float glass profits are expected to continue to maintain a good level.

Photovoltaic glass profit improved month-on-month, next year TCO is expected to release volume: the overall performance of photovoltaic glass in the third quarter is stable, prices rose slightly in September, profitability has improved compared with the second quarter. On Sept. 8, the second-line 600T/D glass production line of Tengzhou Golden Crystal Glass Co., Ltd. of Tengzhou Golden Crystal Glass Co., Ltd. was successfully ignited by the project of TCO glass production line. Up to now, the TCO glass production capacity of the company has reached 4500 million square meters. With the landing of the new production capacity of perovskite / cadmium telluride components, the company's photovoltaic plate performance is expected to benefit.

Earnings forecast, valuation and rating

According to the business situation of the company, fine-tune the net profit of 2023-2025E to 5.88,7.70 and 915 million yuan respectively, corresponding to 16 times, 12 times and 10 times of PE respectively, maintaining the "buy" rating.

Risk hint

The price of products is lower than expected; the price of raw materials is higher than expected; the progress of the company's production capacity construction is not as expected; the progress of new technology is lower than expected.