Matters:
The company announced the operating situation for the third quarter: 23Q3 photovoltaic materials business division profit was about 921 million yuan, silicon material shipments were 67,600 tons (including 0.36 million tons of internal sales); silicon wafer sales volume was about 15 GW (including 6 GW of OEM). We estimate that in the single quarter of 23Q3, the company achieved operating income of 82-8.4 billion yuan, a year-on-year decrease of 14%-16%, a year-on-year decline of 7%-9%; realized net profit of 9 to 1 billion yuan, a year-on-year decrease of 72%-75%, a decrease of 32%-39% over the previous year, of which silicon contributed 8.0 billion yuan in net profit and silicon wafers contributed about 120 million yuan in net profit.
Guoxin Telecom's new opinion: 1) We estimate that 23Q3's silicon sales volume was 64,600 tons, up 28% month on month; single ton price was 630,000 yuan, down 20,000 yuan; single ton production cost was 43,000 yuan, up 0.2 million yuan; single ton gross profit was 20,000 yuan, down 22,000 yuan; net profit per ton was 12,000 yuan, down 22,000 yuan; 2) We estimate that 23Q3's self-operated silicon wafer sales volume was 9GW, up 33% month-on-month; single W price fell 0.36 yuan, down 0.2 percent month-on-month; Yuan; single W cost 0.34 yuan, down 0.2 yuan from month to month; single W gross profit of 0.02 yuan, flat month on month; single W net profit of 0.01 yuan, flat month on month; 3) As the Xinhuan 100,000 ton project gradually reaches production and the power supply shortage situation in Leshan region eases, the company's 23Q4 silicon material production cost per ton is expected to drop from 43,000 yuan in 23Q3 to 41-42,000 yuan. We expect 23Q4 silicon sales to be 67,000 tons, an increase of 4% over the previous month; considering the sharp drop in 23Q4 silicon prices, the net profit per ton is 0.6-70,000 yuan, down 0.5-60,000 yuan from month to month. 4) Maintaining the profit forecast, the company is expected to achieve operating income of 349/318/36.6 billion yuan, -3%/-9%/+15% year-on-year; achieve net profit of 71.3/65.3/8.34 billion yuan, -56%/-8%/+28% over the same period last year. The current stock price corresponding to PE is 4.1/4.5/3.5 times, maintaining the “increase in holdings” rating.
Commentary:
The prices of 23Q3 silicon materials and silicon wafers were running at a low level. The average selling price was significantly lower than 23Q223Q2. Prices of silicon and silicon wafers fell rapidly. P-type polycrystalline silicon dense materials and P-type 182mm silicon wafers fell to lows of 65,000 yuan/ton and 2.8 yuan/sheet respectively at the end of June. Prices of 23Q3 silicon materials and silicon wafers have risen, but they are still operating in the bottom range. The average price of 23Q3 is significantly lower than 23Q2.
We estimate that in the single quarter of 23Q3, the company achieved operating income of 82-8.4 billion yuan, a year-on-year decrease of 14%-16%, a year-on-year decline of 7%-9%; realized net profit of 9 to 1 billion yuan, a year-on-year decrease of 72%-75%, a decrease of 32%-39% over the previous year, of which silicon contributed 8.0 billion yuan in net profit and silicon wafers contributed about 120 million yuan in net profit.
23Q3's silicon production capacity utilization rate has declined, and the cost per ton has slightly increased. In terms of silicon materials, the company's 23Q3 granular silicon shipments were 67,600 tons, an increase of 25% over the previous month; sales volume was 64,600 tons, an increase of 28% over the previous month. We estimate that 23Q3's price per ton of silicon is 630,000 yuan, down 20,000 yuan from month to month; production cost per ton is 43,000 yuan, up 0.2 million yuan; gross profit per ton is 20,000 yuan, down 22,000 yuan; and net profit per ton is 12,000 yuan, down 22,000 yuan month on month. 23Q3 was affected by the climbing of the 100,000-ton Xinhuan project in Inner Mongolia and the tight electricity supply in the Leshan region. The capacity utilization rate declined, and the production cost per ton increased slightly.
As the Xinhuan 100,000 ton project gradually reaches production and the power supply shortage situation in the Leshan region eases, the company's 23Q4 silicon material production cost per ton is expected to drop from 43,000 yuan in 23Q3 to 41-42,000 yuan. We expect 23Q4 silicon sales volume to be 67,000 tons, up 4% month-on-month; considering the sharp drop in 23Q4 silicon prices, net profit per ton is 0.6-70,000 yuan, down 0.5-60,000 yuan from month to month
In terms of silicon wafers, the company's 23Q3 silicon wafer sales volume is about 15GW (OEM 6GW+self-operated 9GW), and output is about 15GW (OEM 7GW+self-operated 8GW). We estimate that 23Q3's self-operated silicon wafers sold 9GW, up 33% month-on-month; single-W price was 0.36 yuan, down 0.2 yuan; single-W cost was 0.34 yuan, down 0.2 yuan month-on-month; single-W gross profit was 0.02 yuan, the same month-on-month; and single-W net profit was 0.01 yuan, flat month-on-month.
Investment advice: maintain profit forecasts and maintain a “increase holdings” rating
Maintaining the profit forecast, the company is expected to achieve operating income of 349/318/36.6 billion yuan in 2023-2025, -3%/-9%/+15% year-on-year; achieve net profit of 71.3/65.3/83.4 billion yuan, -56%/-8%/+28% over the same period last year. The current stock price corresponding to PE is 4.1/4.5/3.5 times, maintaining the “increase in holdings” rating.
Risk warning
The risk that production and sales of photovoltaic silicon materials will not meet expectations; the risk that competition in the industry will increase; the risk that the company's cost reduction will fall short of expectations.