Event: on July 14, the company released unaudited half-year performance forecast data for 2022, showing that the company's operating income in the first half of 2022 was about 15.4 billion yuan, an increase of 75.0% over the same period last year, and its net profit was about 6.9 billion yuan, an increase of 187.5% over the same period last year. Among them, the revenue of photovoltaic materials business is about 14.7 billion yuan, the comprehensive gross profit margin is about 48%, and the gross profit margin of granular silicon products is more than 15% higher than that of bar silicon. The output of polysilicon is about 40,000 tons (the polysilicon output of the associated company excluding the group is about 32000 tons).
The situation of supply falling short of demand continues, the price of silicon is high and the performance of 22H1 exceeds expectations. According to the data of Silicon Industry Branch, in July, the mainstream transaction price of single crystal re-feeding in China was 288-305,000 yuan / ton, the supply of silicon continued to fall short of demand, and the price reached a ten-year high. At present, the bearing of silicon demand is at a high level, and China's photovoltaic demand is growing steadily driven by multiple factors, such as the promotion of the whole county, landscape security grid connection and carbon emission reduction support tools, and the operating rate of downstream silicon wafers continues to increase. Overseas household photovoltaic installations are affected by power shortage and high electricity prices, and have a high tolerance for prices. As the production capacity of silicon enterprises is lower than expected, and a number of domestic silicon enterprises will enter the maintenance period in July, the supply of silicon will decline from the previous month, which also strengthens the market's expectation of domestic silicon shortage.
The high price of silicon and the increase of silicon gross profit margin prompted the company's 2022H1 performance to exceed expectations.
Xuzhou has added 30,000 tons of granular silicon to production, and the production capacity will reach 260000 tons this year. On June 16, the company's Xuzhou base successfully put into production 30,000 tons of FBR granular silicon, only 8 months from start-up to commissioning. The production capacity of granular silicon in Xuzhou base has entered the "6.0 era", forming the world's largest single granular silicon R & D and manufacturing matrix. Xiexin Technology has planned and built a number of 100,000-ton granular silicon production bases in Inner Mongolia, Sichuan and Jiangsu, forming a "tripod" pattern. This year, the total silicon production capacity will reach 360000 tons, including 260000 tons of granular silicon. The company has ordered more than 700000 tons of silicon material in hand, and its production and marketing can be seamlessly docked and quickly linked.
TCL science and technology cooperation agreement demonstrates market confidence, silicon powder project construction to promote self-supply of granular silicon raw materials. TCL Technology announced on July 7th that its subsidiary Tianjin silica plans to sign a "cooperation agreement" with Jiangsu Zhongneng, a subsidiary of Xiexin Technology, to jointly invest in the establishment of a new company, Inner Mongolia Xinhuan, to implement a production and R & D project for the comprehensive utilization of about 100000 tons of granular silicon and silicon-based materials. This agreement further demonstrates the market's confidence in granular silicon products. In addition, the 500,000 tons / year industrial silicon powder processing project jointly built by the company's subsidiary Leshan Xiexin and Xin'an shares (the first phase 200,000 tons / year) is expected to improve the self-supply rate of raw materials for granular silicon production and enhance the company's cost control capacity.
Earnings forecast, valuation and rating: Silicon prices remain high, the company's silicon business continues to grow, and 2022H1 net profit exceeds expectations. We raise the company's 2022 net profit forecast to 9.814 billion yuan (8.17% higher than the previous one), maintain the 2023-2024 net profit forecast of 9.531 billion yuan, 10.033 billion yuan, corresponding to 2022-2024 EPS is 0.36,0.35,0.37 yuan, maintain 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.