The company released the third quarterly report of 2023. In the first three quarters, the company realized revenue of 19.886 billion yuan, with a year-on-year growth of 8.81%, net profit of 2.185 billion yuan, down 52.03% year-on-year, net profit of 1.936 billion yuan deducted from non-parent, down 57.38% year-on-year; Among them, Q3 realized revenue of 7.949 billion yuan (yoy+50.67%, qoq+28.02%), net profit of 402 million yuan (yoy-60.15%, qoq-48.40%), net profit of 344 million yuan deducted from non-parent (yoy-66.08%, qoq-45.56%).
It is mainly due to the poor performance of domestic and foreign demand affected by weak global economic growth and inflation. In the third quarter, the average price of industrial silicon and organic silicon continued to fall month-on-month, but the inventory pressure was obviously relieved, and the performance was slightly lower than expected.
In the third quarter, the prices of industrial silicon and organic silicon bottomed out, and the marginal improvement of inventory pressure of the company was obvious. According to the company's announced operating data, the average price of industrial silicon and organic silicon Q3 was weak due to weak demand growth, inflation and other reasons. The average price continued to fall. The average prices of industrial silicon and cyclic siloxane were 11801 yuan/ton and 12010 yuan/ton respectively, down 12% and 13% respectively from Q2. However, the company's industrial silicon inventory demineralization effect in the third quarter was obvious. Q3 achieved sales volume of 361,800 tons and self-use of 114,200 tons. The inventory of industrial silicon in a single quarter decreased by more than 200,000 tons month-on-month, and the relief of inventory pressure drove the price of industrial silicon to bottom out. According to the data of Baichuan Yingfu, the average price of industrial silicon in October was 15423 yuan/ton, increasing by about 14% compared with the average price in July. With the approaching dry season of Q4 and the improvement of downstream demand, the boom of Q4 industrial silicon is expected to further warm up.
The bottom of the industry boom expands against the trend, and the photovoltaic integrated industrial chain is fully connected, boosting the value of the industrial chain. On the one hand, the company relies on the cost advantage brought by the coordinated development of the "coal-electricity-silicon" industrial chain to expand against the trend at the bottom of the industry boom, continuously improving the production capacity and sales volume of industrial silicon and organic silicon and showing strong profitability toughness. Q3 industrial silicon and organic silicon achieved sales volume of 360,000 tons and 280,000 tons respectively, with a month-on-month increase of 50% and 49% respectively. The market share of industrial silicon and organic silicon was further increased; As of October 2023, the Company's photovoltaic integration industry project of "polysilicon-single crystal slice-battery module & photovoltaic glass-photovoltaic power generation" has been fully connected, and the Company continues to deepen the layout of the whole industrial chain and promote the industrial chain to achieve strong chain extension and chain supplement.
Adjust profit forecast and maintain buy rating: Considering the low terminal demand for industrial silicon and organic silicon since the second half of 2022, we adjust profit forecast. It is estimated that the net profit of the company from 2023 to 2025 will be 28.32 billion yuan, 33.48 billion yuan and 4.602 billion yuan (previously 3.58 billion yuan, 43.56 billion yuan and 5.328 billion yuan), corresponding PE will be 23X, 20X and 14X respectively, maintaining "buy" rating.
Risk tips: product prices fall; capacity expansion is not as expected; demand decline risk