The high-purity quartz technology industry is leading, and production and sales are booming, and the company is one of the few enterprises in the industry with a full industry chain that produces high-purity quartz sand and quartz glass materials for semiconductors, photovoltaics, and optoelectronics, and their precision processed products. It has strong influence and competitive advantage in the quartz industry at home and abroad. According to the company's performance forecast, it is expected to achieve net profit of 4.75 to 5.33 billion yuan in 2023, an increase of 351.44%-406.56% over the previous year, and the company's performance will achieve rapid growth based on the high base in 2022. In December of this year, the company plans to repurchase shares to implement equity incentives or employee stock ownership plans, demonstrating confidence in the company's continued development in the future.
Mastering the “hard core” technology of high-purity quartz sand, expanding production capacity to consolidate its market position, the company has long been committed to innovation and research and development of high-purity quartz sand production technology, industrialized high-purity quartz sand at the end of 2009, and sold large-scale to downstream companies in 2010. The company is the first domestic manufacturer of high-purity quartz sand to break foreign monopolies and achieve mass production. It is one of the few companies in the world that has technology to mass-produce high-purity quartz sand. The quality of high-purity quartz sand products is stable, and the technology has reached the international advanced level. In response to development opportunities in the photovoltaic and semiconductor markets, the company has accelerated the construction of 60,000 tons of high-purity quartz sand production capacity. It is expected to be completed and put into operation by the end of 2023, which will further increase the market share of high-purity sand.
An industry benchmark for continuous melting technology, quartz product certification is progressing smoothly
The company has a full set of production processes for fused quartz, fused quartz, and synthetic quartz. Through technical research on continuous melting production systems, the company has steadily promoted the use of eighth-generation continuous melting production technology, and various high-end quartz products for new semiconductors have entered the market. After 30 years of innovation, development and research and development, the company's continuous fusion production technology has developed into an industry benchmark. Related quartz products have passed certification from international semiconductor equipment manufacturers such as TEL and Lam Research, and AMAT certification has also made phased progress. At present, the company's 6,000-ton electronic grade quartz product project was completed and put into operation in October 2022, and is actively promoting the construction of the semiconductor quartz material series project (Phase III).
Investment advice and profit forecasting
The company is deeply involved in high-purity quartz sand and semiconductor/photovoltaic/optoelectronic quartz glass materials and finishing. The entire industry chain has significant advantages, and the implementation of production capacity expansion projects has provided strong support for the company's performance explosion. With the smooth progress of semiconductor certification, the company's electronic grade quartz products business is expected to become a new performance flashpoint.
We estimate that the company's net profit for 2023-2025 will be 5.238 billion yuan, 6.299 billion yuan, and 7.885 billion yuan, respectively. The current stock price corresponding to 2023-2025 PE is 5.27 times, 4.38 times, and 3.50 times. We gave it an “gain” rating considering strong downstream demand and the company's strong product barriers.
Risk warning
Macroeconomic risks, PV industry demand falling short of expectations, capacity expansion falling short of expectations, accounts receivable risk.