Hesheng Silicon Industry (603260): Second-Quarter Performance Exceeds Expectation; Industrial Silicon Is Expected to Rebound in Second Half
The company achieved revenue of 46 in the first half of 2019.
6.1 billion (yoy-14.
85%); net profit attributable to mother 6.
5.4 billion (yoy-54.
76%); net profit after deduction 5
6.3 billion (yoy-59.
55%), the difference between the front and rear calibers is the main reason.
US $ 0.9 billion in government grants; net operating cash inflows 6.
4.3 billion (+7 year-on-year.
Among them, Q2 single-quarter revenue was 22.
190,000 yuan (yoy-31.
26%, quarter 9.
15%); net profit attributable to mother 2.
5.2 billion (yoy-69.
As prices fell, industrial silicon volume affected net profit performance, and net operating cash inflows in the second quarter.
$ 3.7 billion: Affected by changes in the industry’s business climate, the company’s average industrial silicon sales price in the first half of the year (1.
30,000 yuan / ton, -12 years old.
42%), DMC average selling price (1.
97 tons / ton, 30 compared with the same period last year.
On a month-on-month basis, the prices of main products of Q2 organic silicon increased slightly, while the prices of industrial silicon were basically stable.
Q2’s industrial silicon realized revenue11.
900,000 yuan (yoy-28.
00%, quarter 20.
66%), the total revenue of silicones8.
9.6 billion (yoy-34.
97% quarterly +9.
The company’s industrial silicon output in the second quarter was 11.
05 benchmark (yoy-20.
33% quarter to -29.
Industrial silicon output increased in the second quarter. We believe that mainly due to the sluggish downstream demand and the price falling to the industry cost line, the company adopted a strategy of proactively reducing negative maintenance and digesting inventory.
In the first half of the year, the company’s inventory of goods decreased by nearly 3.
200000000.Industrial silicon Q2 exports 11.
59 Statutory (yoy-19.
77% quarterly 20.
85%), considering self-consumption2.
82 announcement, the company Q2 export + for personal use14.
In the early stage of 41, it was higher than the output 3.
36 At least, it further reflects the company’s better inventory removal effect.
The operating rate has decreased, but large conversions such as 40-inch industrial silicon and supporting factories have brought a lot of supplementary depreciation (the company’s depreciation expenses in the first half of the year).
62 ppm, an increase of 1 per year.
As a result, the company’s net profit attributable to its mother in the second quarter based on accounting profit was 2.
$ 5.2 billion, compared with a net operating cash inflow of 4.
Affected by the decline in product prices, the company’s gross profit margin in the first half of the year.
65%, a reduction of nearly 14 pct a year, of which Q2 gross profit margin is 24.
33%, a decrease of 6pct from the previous month.
Total company expenses in the first half of the year.
63%, a reduction of 0 per year.
7pct, net interest rate 14.
17% reduction of 13 pct per year.
On the whole, due to the decline in product prices and the production and sales of industrial silicon, the increase in depreciation affects the company’s Q2 performance below market expectations, but operating cash flow is good.
The peak season for photovoltaic demand is approaching, and the price of industrial silicon is expected to pick up. In the first half of the year, due to the delay in the implementation of policies, internal photovoltaic demand was suppressed, and the number of newly installed units nationwide fell by 53%.
In addition, the aluminum alloy market is affected by the end consumption of automobiles and other industries, and the demand for industrial silicon has weakened.
From the current price point of view, the industry is basically in a state of decline (in the first half of the year, the subsidiary’s western Hesheng net profit was -7.63 million yuan and the eastern Hesheng net profit was 870,000 yuan).
The national bidding policy came into effect, and Guodian Investment and other companies successively launched centralized bidding. Domestic photovoltaic installations are expected to usher in the second half of the year.
After entering the third quarter, the operating rate of Southwest hydropower silicon companies will turn into a dry season and decline.
The industrial silicon supply and demand structure is expected to improve in the second half of the year, and product prices are expected to pick up.
After the company’s inventory is de-allocated in the second quarter, it is expected that production and sales will resume in the second half of the year.
In the long run, the era of photovoltaic parity on-line access is gradually approaching. The increase in long-term consumption will continue to drive the growth of industrial silicon demand, and the company will fully benefit as an industry leader.
Leading this round of organic silicon production expansion cycle, cost advantage Advantage of the company’s core competitiveness: organic silicon increased production capacity this year and next, according to our statistics there is a clear construction trend of supplementary production capacity of about 120 (single count), the industry is about to enterA new round of capacity digestion cycles.
The company played a leading role in this round of capacity expansion. The 10-steering coaxial and deep processing projects started trial production. It plans to bring new increases in the third quarter. The 20-ton insertion project has also started construction according to the semi-annual report.
At that time, the company will firmly overlap the industry’s leading position with a capacity scale of nearly 1 million silicone monomers.
In the period of capacity expansion, cost control will determine the competitiveness of enterprises.
Based on Xinjiang, the company uses its abundant coal resources to provide its own power plants, and the industrial silicon-organic silicon integrated industrial chain has a clear cost advantage.
Earnings forecast: The expected decline in product prices and the decline in industrial silicon production and sales levels in the first half of the year, we lower the company’s 2019-南京夜网2021 revenue forecast to 102.
08 million yuan, net profit attributable to the mother to 15.
25, 23.65 ppm, corresponding to 17 for PE.
8X, the company’s industrial silicon business situation is expected to pick up in the second half of the year, optimistic about the company’s long-term value as a leader in coal-electricity silicon integration, maintaining a “buy” rating.
Risk warning: product prices fall sharply; downstream demand is less than expected; new project progress is less than expected