Our point of view: Kaisheng Xinneng has a clear strategic positioning, focusing on the main business of photovoltaic glass and hosting thin film cell assets; the improvement of supply and demand + the downward cost of soda ash, the profit margin of photovoltaic glass industry is expected to be repaired; the company's short-term performance is expected to improve, long-term space upward. As of June 30, 2023, the company's PE (TTM) is 11.3X and MRQ is 0.83X. Investors are advised to pay attention.
Strategic positioning is clear, central enterprise new energy materials platform: Kaisheng Xineng is the new energy materials platform of China Building Materials Group, stripping display glass in 2022, focusing on photovoltaic glass main business, photovoltaic glass production capacity expansion, and hosting thin film cell assets.
With the improvement of the relationship between supply and demand and the downward cost, the profit margin of the photovoltaic glass industry is expected to be repaired: 1) the price reduction of components stimulates the terminal demand, and the supply and demand of photovoltaic glass is expected to improve: on the demand side, the price of silicon and components will be reduced, boosting the photovoltaic project IRR, photovoltaic installation and glass demand release. On the supply side, low earnings + capacity risk warning, photovoltaic glass production pace slowed down.
According to Zhuochuang Information, at the end of January to May 2023, the daily melting rate of domestic photovoltaic glass production was 91.4%, 83.9%, 65.0%, 52.6% and 56.1% respectively, and the overall capacity release has slowed down. Overall, according to Zhuochuang information, at the end of May 2023, the daily melting capacity of photovoltaic glass is 87700 tons, according to the current proportion of double glass components, glass yield and so on, it can meet the packaging demand of more than 40W components in a single month; according to the monthly assembly production schedule of Infolink,2023 in June-July, about 44GW, the overall balance between supply and demand of glass. In view of the overall slowdown in the ignition pace of the industry, and the demand for components is expected to exceed expectations, we do not rule out the possibility of destocking photovoltaic glass in 2023Q3. 2) cost pressure decreased: with the production capacity of Yuanxing Energy Alashan Natural Soda Project put into production and climbing, the spot price of soda ash dropped from 2900 yuan / ton to about 2000 yuan / ton, reducing the glass cost pressure.
Photovoltaic glass capacity expansion, thin glass proportion increase: in terms of production capacity, Kaisheng Xinneng can rapidly expand photovoltaic glass production capacity through self-construction and acquisition, with a daily melting capacity of 4650 tons per day at the end of 2022. + 116.3% X + photovoltaic glass sales exceeded 200 million square meters in 2022, an increase of 80% +. In addition, the company's Yixing New Energy production capacity of 600t / d was ignited in May 2023, and two 1200 t / d production lines of Luoyang New Energy are under construction. From the perspective of product structure, compared with 3.2mm glass, the proportion of 2.0mm and 1.6mm glass with higher profit margins is expected to increase.
Managed thin film cell business assets: 2022Q2 began to host shares related to the thin film solar cell business of Kaisheng Technology Group, including 55% of Chengdu China Building Materials, 45% of Ruichang China Building Materials and 60% of Kaisheng Photovoltaic; in December 2022, the above escrow assets were transferred to Kaisheng Glass Holdings, a wholly-owned subsidiary of Kaisheng Technology Group, and the escrow assets were renewed to be 100% equity of Kaisen Glass Holdings.
Performance tracking: 2023Q1, the company's income, gross profit, return net profit and non-return net profit are 14.26,1.40,0.12 and 3 million yuan respectively, which are + 41.8%, + 23.1%,-88.9% and-29.2% respectively compared with the same period last year. Non-recurrent profit and loss are mainly government subsidies. 2023Q1, company gross profit margin 9.8%, year-on-year-1.5pcts. During the period, the average price of photovoltaic glass market is under pressure, but the costs of natural gas, soda ash and quartz sand are relatively high, resulting in a decline in photovoltaic glass gross profit margin and flat net profit.
Risk tips: product prices fluctuate, the company's capacity expansion is less than expected, costs rise higher than expected, and the industry has overcapacity.