Event

On July 31, the company released its semi-annual report on 2021. In the first half of 2021, the company achieved operating income of 414 million yuan, an increase of 71.4% over the same period last year. The net profit returned to the parent was 147 million yuan, an increase of 71.9% over the same period last year. The non-net profit was 133 million yuan, an increase of 55.3% over the same period last year. The performance is in line with expectations.

Business analysis

Sales of core products vinyl double head and hexamethyldisilazane increased. In terms of vinyl double heads, the company originally had a production capacity of 700t, but the newly built capacity of 3000 tons was put into operation in the first quarter of 2021. With the gradual climbing of production capacity, the company's sales continued to grow. Hexamethyldisilazane as an auxiliary is mainly used in lithium battery, photovoltaic, medical beauty, semiconductor, aerospace and other fields, the company is the leader in hexamethyldisilazane subdivision field, with the technology improvement and adjustment, the competitive advantage will be further prominent.

Electronic grade hexamethyldisilazane continues to be sold to semiconductor customers. At present, the company breaks through electronic grade hexamethyldisilazane technology, electronic grade hexamethyldisilazane is mainly used in the field of semiconductor chemicals, and its value is more than 3 times that of ordinary hexamethyldisilazane. At present, the output of electronic grade hexamethyldisilazane is about 800-1000 tons, and the company continues to sell downstream customers. With the expansion of electronic grade hexamethyldisilazane, the company's profit structure will continue to be optimized.

The production of phenylchlorosilane is expanded to consolidate the competitive advantage and extend the phenyl intermediate to the downstream terminal. In terms of phenylchlorosilane, the company's phenylchlorosilane plant has undergone technical transformation, and the overall output has been improved. in addition, the company's phenylchlorosilane plant will further expand production and consolidate its competitive advantage. In the long run, the company extends from phenyl chlorosilane products to phenyl resin, phenyl silicone oil and phenyl silicone rubber. According to the company announcement, 20,000 tons of phenylchlorosilane downstream products are expected to be completed in August 2022. Help the company to further expand to the lower reaches of the larger market space, conducive to long-term growth.

Profit Forecast and Investment suggestion

We forecast that the return net profit of the company from 2021 to 2023 is 2.98,3.8 and 490 million yuan respectively, the EPS is 1.91,2.46 and 3.17 yuan respectively, and the current market capitalization corresponding to PE is 27.8,21.6 and 16.8 respectively, maintaining the "buy" rating.

Risk hint

The progress of production capacity construction is not as expected; the pattern of product competition is deteriorating; the risk of product price fluctuation; the risk of lifting the ban; exchange rate fluctuation