Event: the company issued a performance forecast for the first quarter of 2021, which is expected to achieve a net profit of 3051.93-34.1098 million yuan, an increase of 70% to 90% over the same period last year. Excluding the impact of 8.3 million equity incentive fees, the performance is in line with expectations. Revenue is expected to grow by about 45% in the first quarter compared with the same period last year, including significant growth in revenue from solar backplane films and high-end optical films (quantum dot films and composite films), driving the company's performance to a higher level.
With the high demand for high-end optical film, the company will break through the production bottleneck and seize the growth opportunity. Benefiting from the strong demand for terminals, the demand for optical films in China is on the rise. In 2021, many terminal manufacturers take advantage of the efforts to promote the Mini LED display to start the first year of commercialization. At the beginning of the outbreak of downstream demand, the economy throughout the year is secure, or it will drive the demand for high-end optical films to meet the sustained high growth. The company has achieved fruitful results in the application and promotion of quantum dot membrane and composite membrane, with continuous promotion of mass production and delivery, and remarkable market share advantage. at present, the production capacity is full and demand exceeds supply. The company plans to invest 300 million yuan to build an optical film production base, and vigorously increase the production capacity of high-end optical films such as composite films, quantum dot films and small-size brightening films in the next three years. The improvement of product structure and the release of superimposed scale effect will help to improve profitability and industry status.
Significantly benefit from the high prosperity of the photovoltaic industry, photovoltaic backplane business to open up new growth space. The global demand for new photovoltaic installations continues to increase, and the domestic market demand increases significantly. According to the New Energy Department of the National Energy Administration, the average annual installed capacity of photovoltaic in China will reach 70GW during the 14th five-year Plan period. Double-sided modules continue to infiltrate with the increase in downstream recognition. According to the China Photovoltaic Association, the market share increased by 15.7% to 29.7% in 2020, and the market share is expected to exceed 60% in 2025.
The upsurge in the photovoltaic industry has led to a surge in demand for photovoltaic backplanes such as TPO and photovoltaic packaging film. The company's photovoltaic backplane has passed certification including Jingke, Longji and other certification and mass production delivery, new product production and sales are booming, and capacity expansion continues to advance. We are optimistic that the company will enjoy industry dividends to accelerate market development and increase market share.
Expand the packaging film to extend the photovoltaic product line, improve the industrial layout, and develop in coordination with the backplane film. POE film and EPE film benefit from the penetration of double glass modules and the demand is rising. According to the China Photovoltaic Association, their combined market share increased by 11% to 25.5% in 2020 compared with the same period last year, and will continue to rise in the future. With the continuous accumulation of R & D, technology and talent resources, the company has set up additional funds to raise 200 million yuan to build a photovoltaic packaging film production base, which has something in common with the original product technology, production technology and customers. It is expected to coordinate the development and strengthen the advantages of the industrial chain, and further enhance the competitive position of the photovoltaic race track.
The multi-point layout of foreign investment redevelops the business territory, and the functional membrane platform enterprises are taking shape day by day. The company has previously invested in the layout of optoelectronic display (PET base film, OLED luminous material, LCP material, silicon-based OLED micro display, etc.), automobile (window film, decorative film, etc.) and other fields. Recently, it was announced that the newly established wholly-owned subsidiary Anhui Jizhi, the holding subsidiary Tianyuan New Materials (53%) and the subsidiary Ningbo Jiyang (60%) Xiangshan Jiyang, a wholly-owned subsidiary, respectively focus on solar packaging film, adhesive products, optical glue and solar photovoltaic materials, will further improve the photovoltaic display and photovoltaic industry chain, accelerate strategic layout, and shape new profit growth points in the future.
Profit forecast and investment advice: Chi Chi Technology is a domestic leader in display optical films, which now shows the leading global position of thin films and the steady growth of high-end optical films. New products such as solar backplane films are expected to benefit from industry development and technology upgrading dividends to achieve rapid development. We expect the company to achieve a revenue of 2.506 billion yuan and a net profit of 257,364 million yuan from 2021 to 2022. At present, the corresponding PE for 2021-2022 is 28.9xmax 20.4x, maintaining a "buy" rating.
Risk hint: the risk of intensified market competition, the risk of showing the iteration of technological renewal, and the risk that profitability is lower than expected.
