Event: on April 20, the company released unaudited first-quarter performance data for 2022, showing that the company's operating income in the first quarter of 2022 was about 6.99 billion yuan, and its net profit was about 3 billion yuan, of which the revenue of photovoltaic materials business was 6.68 billion yuan. the comprehensive gross profit margin of the business is 46.0%, and the gross profit margin of granular silicon products is more than 15% higher than that of bar silicon.
Silicon prices remain high under the influence of supply and demand, and the company's silicon production capacity increases. In 2022, the installed capacity of new photovoltaic in China continues to increase, and the demand for photovoltaic increases steadily. The capacity increment of silicon material expansion has been slowed down by the epidemic, the situation that supply falls short of demand in the industry has not been alleviated, and the price of silicon material is still high. According to Antaike data, in April 2022, the average prices of single crystal re-feeding, densification and cauliflower in China were 25.33,25.09 and 248100 yuan / ton, respectively. The company is actively expanding its granular silicon production capacity. By the end of the first quarter of 2022, the company has an annual production capacity of 45000 tons of bar silicon and 30,000 tons of granular silicon, of which 18600 tons of polysilicon have been produced in the first quarter. With the increase in sales prices and gross profit margin, the company is expected to achieve a further increase in revenue and net profit in silicon.
Customer long order reflects product recognition, signing a cooperation agreement to strengthen silicon production and downstream application research and development: with the advantages of cost reduction of the company's products gradually highlighted, the company's products have been recognized by downstream customers, with a single production capacity of 700000 tons.
The company signed a cooperation framework agreement with TCL Technology and Tianjin Central on April 19, 2022 to set up a joint venture company in Hohhot and implement a project with a total investment of 9 billion for investment and R & D in the production and downstream applications of 100000 tons of granular silicon and silicon-based materials. the company or its holding subsidiary will hold 60% of the shares in the joint venture company. In addition, the company will also set up another joint venture company to implement a project with an estimated total investment of 3 billion yuan for the construction of 10,000 tons of motor and polysilicon projects, and the company's related parties will hold 60% of the joint venture company.
The advantages of cost reduction and low carbon footprint of granular silicon are highlighted, and the low carbon footprint promotes the low-carbon transformation of energy structure: the company's granular silicon products have the advantages of cost and emission reduction. In terms of cost reduction, the company's Xuzhou granular silicon products currently have a stable control of comprehensive power consumption in 14.8kWh/kg and comprehensive steam consumption in 15.3kg/kg. In terms of low carbon footprint, the company obtained the carbon footprint certification issued by the French Energy Agency in October 2021, and the carbon footprint of the company's granular silicon functional unit is only 37 kg of carbon dioxide. The advantages of Poly Xiexin's granular silicon products in cost reduction and carbon footprint will gradually radiate to the downstream wafers and components, actively contributing to the transformation of the global energy structure to low carbon.
Earnings forecast, valuation and rating: Silicon prices remain high, the company's silicon business continues to grow, and overall net profit exceeds expectations. We raised the company's net profit forecast for 2022-2024 to 9.073 billion yuan, 9.531 billion yuan and 10.033 billion yuan (the net profit increased by 44.24%, 35.67% and 31.44% respectively), corresponding to the EPS of 0.33,0.35,0.37 yuan in 2022-2024, maintaining the "buy" rating.
Risk hints: industry fluctuation risk; order fulfillment risk; risk of loss of core technical personnel; risk of technology substitution, underproduction of fund-raising projects, etc.