Incident description
Tianyi Shangjia released its 2023 Express Report: Annual revenue of 2,216 billion yuan, up 124.51% year on year; total profit of 267 million yuan, up 35.89% year on year.
Incident comments
Collaborative sales in the photovoltaic sector are being strengthened. During the reporting period, the company's photovoltaic new energy business sector, production capacity of carbon carbon products and quartz crucibles was gradually released, and the synergy of monocrystalline drawing auxiliary materials was further demonstrated (carbon carbon materials basically overlapped with quartz crucible customers, creating a certain synergy), driving the company's overall total revenue and total profit to rise compared to the same period last year; (2) During the reporting period, in order to ensure the collection of high-speed rail powder metallurgy gates, the company adjusted the unit price of the product in due course, and the sales strategy changed drastically, and the business generated losses (3); During the reporting period, affected by the industry, the company's subsidiary Chengdu Ruihe Technology Co., Ltd. did not meet the promised performance in 2023. The company confirmed compensation revenue in accordance with the relevant commitment terms of the previous transaction agreement and carefully considered goodwill impairment matters; (4) During the reporting period, as long-term assets of various business sectors were gradually put into production and use, fixed costs increased.
The quartz crucible remains the core support. As of the 3rd quarter report of 2023, the company has signed a long-term procurement framework agreement with Silicon Beko of the United States. The two parties have agreed that from 2024 to 2028, the company will purchase a total of 7817 tons of quartz sand from SiBico.
At the same time, the company chose to expand quartz crucible production capacity in Jiangsu and Sichuan, and some production lines are expected to be put into use in 2024Q2. As for Jiangsu Jingyiyang Company, the company's current operator of quartz crucibles, it achieved revenue of 1 billion yuan in the first 11 months of 2023 (150 million yuan in 2022) and net profit of 270 million yuan (39.68 million yuan in 2022). At the same time, the company plans to further strengthen the management of Jingyiyang through the acquisition of the remaining 10% of its shares, which is expected to improve its overall operating efficiency.
The multi-dimensional growth curve logic remains unchanged, and there is more room for growth in the medium term. After years of dedicated layout, the company has formed a multi-dimensional business curve, such as a high-speed rail gate, carbon carbon heat field, quartz crucible, carbon ceramic brake disc, lithium electric heating field, etc. Looking at it now, although demand from many business industries is under pressure in the short term, there is still plenty of room for growth in the medium term. What needs to be paid attention to is that the company's layout in every field is based on production-side processes, technology and cost as important layout elements, continuously strengthening its cost advantage and competitiveness in the market where it is located, thereby providing solid backing for mid-term share development.
The expected 2023-2024 performance is 270 to 650 million yuan, corresponding PE is 25 or 10 times higher, and the purchase rating.
Risk warning
1. The capacity utilization rate of quartz crucibles is insufficient;
2. The price performance of photovoltaic heat fields is weak.