The company released the 2023 annual report and the 2024 quarterly report. In 2023, the company achieved revenue of 26.584 billion yuan (yoy +12.37%), net profit of 2,623 billion yuan (yoy -49.05%), net profit after deducting non-attributable net profit of 2,188 billion yuan (yoy -56.80%), of which Q4 achieved revenue of 6.697 billion yuan (qoq -15.74%) and net profit of 438 million yuan (qoq -26.98%). . In the first quarter of 2024, the company achieved revenue of 5.416 billion yuan (yoy -5.46%, qoq -19.14%), net profit of 528 million yuan (yoy -47.36%, qoq +20.45%), net profit after deducting non-return to mother of 520 million yuan (yoy -46.02%, qoq +106.79%). The company's quarterly performance improved significantly from month to month, and the slump showed profit resilience, waiting for demand to recover.
Industrial silicon and silicone prices are running at the bottom, waiting for demand to recover. Industrial silicon: The overall performance of industrial silicon in 2023 was characterized by a double increase in supply and demand, a slight reduction in exports, and price range fluctuations. According to the Silicon Industry Branch data, industrial silicon production in 2023 reached 3.7 million tons, up 13.8% year on year, entering 2024. Affected by the industry's high inventory and demand for post-holiday replenishment, industrial silicon prices continued to fall below the cost line of the main production area of the industry. The price difference has fallen below the 10% fraction of history. As new polycrystalline silicon production capacity continues to be released, industrial silicon prices are expected to rise steadily in 2023; Silicone: The overall silicone industry is expected to rise steadily in 2023. pressure In operation, the domestic silicone market continued to decline after a brief rise. On the one hand, the upstream raw material silicon continued to weaken, and on the other hand, new monomer production capacity was gradually released, and the market was already oversupplied. Under cost pressure, single manufacturers could only choose to reduce the load or stop their cars, and the entire industry was at a loss. According to Baichuan Yingfu statistics, the average domestic silicone DMC price in 2023 was 14,921 yuan/ton, a year-on-year decrease of 37%. The company's industrial silicon and silicone profits are expected to recover further as downstream demand gradually recovers, and the company's industrial silicon and silicone profits are expected to recover further.
The integrated photovoltaic industry chain, and the high-end downstream of silicon carbide and silicone promote the value increase in the industrial chain.
The company extends the entire downstream photovoltaic industry chain vertically. Currently, the “polysilicon - monocrystalline chip - battery module & photovoltaic glass - photovoltaic power generation” integrated photovoltaic industry project has been fully implemented; the yield of silicon carbide products is at the leading level of domestic enterprises. 6-inch substrates and epitaxial films have been verified by many domestic downstream device customers, and the 8-inch substrate has achieved sample output; R&D of high-end silicone products and other technologies is progressing in an orderly manner, helping the company to increase the value of the industrial chain.
Adjust profit forecasts and maintain a “buy” rating: Considering that it will take time to recover demand for industrial silicon and silicone terminals, we will adjust the profit forecast. We expect the company's 2024-2026 net profit of 28.19 billion yuan, 37.03 billion yuan, and 4.168 billion yuan (previously, 3.48 billion yuan and 4.602 billion yuan, with an additional net profit of 4.188 billion yuan in 2026). The corresponding PE is 20X, 15X, and 14X, respectively, to maintain the “buy” rating.
Risk warning: product prices fall; capacity expansion falls short of expectations; risk of falling demand