Event: the company released three quarterly reports, with revenue of 495 million in the first three quarters of 2022, down 3.4% from the same period last year, and net profit of 66.74 million yuan, down 35.74% from the same period last year. Of this total, 2022Q3 achieved revenue of 206 million, an increase of 3.94% over the same period last year, and its net profit was 29.0585 million yuan, down 29.55% from the same period last year.
Comments:
Operations improved in the third quarter, with gross margins still under pressure. In the third quarter, the company got rid of the unfavorable situation of the decline in revenue in the second quarter compared with the same period last year, and revenue in the third quarter increased by 3.94% compared with the same period last year. In terms of gross profit margin, 2022Q3 gross profit margin reached 23.92%, increased 2.83pct month-on-month, improved month-on-month, reduced 7.23pct year-on-year, compared with last year, gross profit margin affected by raw material prices is still under pressure. The sales / management / R & D / financial expense rates in the third quarter were 2.43%, 3.03%, 3.54%, 1.66%, respectively, and the impact of exchange earnings in the second quarter gradually decreased.
According to the company's semi-annual report, the company is one of the leading enterprises in China's artificial quartz stone industry. The company has established a long-term and stable cooperative relationship with a number of well-known enterprises, and its competitiveness in the international market has become increasingly prominent. The domestic / foreign business income of 2022H1 Company is 2.26 million yuan respectively, accounting for 78.03% and 21.47% respectively. The revenue of 2022H1 plate and table top was 180 million yuan, accounting for 62% and 37% respectively, while the proportion of table top revenue increased from 31% in 2021. In terms of customer service, the company has proposed the transformation from "product manufacturing" to "product + service" mode, linking customers through customized services to meet the individual needs of customers.
It is proposed to issue no more than 540 million convertible bonds to build an integrated project of R & D, development and manufacturing of new silicon materials.
The company issued a notice on June 1, 2022, signing a "project investment contract" with the Luocheng people's Government, intending to invest 1 billion yuan to invest in the R & D, development and manufacturing integration project of Luocheng silicon new materials. It was announced on September 14, 2022 that the application for issuing convertible bonds of no more than 540 million yuan was accepted by the Securities Regulatory Commission, and the funds raised will be used for the R & D, development and manufacturing integration project of Luocheng silicon new materials (phase I). The silicon materials produced by this fund-raising investment project are mainly used in artificial quartz boards, photovoltaic glass, industrial silicon, liquid crystal display screens and other fields. after completion, it can increase the production capacity of about 355000 tons of quartz fillers, 70,000 tons of low-iron quartz sand for photovoltaic glass and industrial silicon, 60,000 tons of quartz powder for liquid crystal display glass and 39900 tons of quartz powder for electronic and electrical fillers. The completion of the project will help the company to extend the layout of new silicon materials upstream and realize two-wheel drive of artificial quartz and new silicon materials.
Coverage for the first time, giving the company an "overweight" rating. It is estimated that the company's net profit from 2022 to 2024 will reach 1.2,1.7 and 230 million yuan respectively, an increase of-15%, 37% and 40% over the same period last year, with a corresponding valuation of 27, 20 and 14 times.
Risk hint: product prices fall, valuations and earnings forecasts fall short of expectations.
