Hesheng Silicon (603260): 2018 performance exceeded expectations City share increased cost control controls profitability

Investment Highlights: The net profit attributable to mothers in 2018 exceeded expectations.

Operating income for 2018 was 110.

8 ‰, an increase of 59% in ten years, net profit attributable to the mother is 28 ‰, an increase of 84 in ten years.

9%, with a performance forecast of 29.

100 million-30.

5 billion exceeded expectations.

Among them, the net profit attributable to the mother in the fourth quarter was 5.

59 trillion, down 30% from the third quarter, the performance of the first quarter is due to the decline in silicone prices, the average price of silicone D4 in the 南京夜网 third quarter3.

50,000 yuan / ton, the average price in the fourth quarter is 2.

3 million tons / ton; Second, due to the supporting self-contained power plant of the Shanshan plant and the metal silicon plant all put into operation, which led to increased depreciation in the fourth quarter and the new production capacity utilization rate was still climbing to affect short-term performance.

In 2019, the company’s ramp-up in silicon metal production capacity will gradually contribute to its performance.

Expansion project one: Shanshan 40 entered the metal silicon project in 2018, and the operating rate is steadily climbing. The introduction of supporting power plants and graphite electrode plants to operate sustainable profitability will gradually appear.

Expansion project 2: The annual output of 10 plug-in serial ports and downstream deep processing investment projects, is expected to start production in the third quarter of 2019.

Expansion project III: Shihezi has an annual output of 20 plug-in serial port projects and is expected to start production in 2021.

After the three projects are fully completed, the company will have a capacity of 90 tons of silicon metal (including 10 inches of Jinsong Silicon Industry) and 93 tons of organic silicon monomer.

In 2019-2021, the supply and demand of metal silicon will gradually meet a tight pattern. At the same time, supply and demand will grow steadily. It is expected that the price of metal silicon will increase slightly year by year. It is expected that the average price of metal 441 will be 12,000 yuan / ton in 2019-2021.12600 yuan / ton, 13,000 yuan / ton.

The price of organic silicon is currently at a low level in history. On April 22, Baichuan Information D4 price was 2.

30,000 yuan / ton, historical price range is 1.


60,000 / ton, despite the excess supply and demand in the industry, the price has fallen to the bottom area. It is expected that the price range of silicone D4 in the future will be 1.


30,000 / ton.

Revise down earnings forecast and maintain BUY rating.

We adjusted the company’s metal silicon sales to 68 in 2019-2021.

7 benchmarks, 77 benchmarks, and 87 indicators (the original forecast was 75 for 2019-2020).

7 baseline, August), sales of silicone products are expected to be 30 in 2019-2021.

3 early, 36.

1 initial, 46.

1 benchmark, product price adjustment The average sales price of metal silicon series products for 2019-2021 will be 11,850 yuan / ton, 12,450 yuan / ton, and 12,850 yuan / ton (the original forecast was 12550 yuan / ton and 13050 yuan for 2019-2020 respectively)/ Ton), it is estimated that the average price of cyclic siloxane in 2019-2021 will be 21,000 yuan / ton, 19,000 yuan / ton, and 19,000 yuan / ton. At the same time, considering the company’s new fixed asset depreciation life limit, we raised itThe forecast of total depreciation for 2019-2020. Based on the above adjustments, we lower the company’s profit forecast for 2019-2020 and supplement the profit forecast for 2021. It is estimated that the net profit attributable to mothers in 2019-2021 will be 25 billion and 33, respectively.

6 billion, 45.

6.5 billion (the original forecast was 33 for 2019-2020).

7.3 billion, 39.

6.7 billion), the net profit growth rate was -11%, 34%, 36%, corresponding to PE respectively 16 times, 12 times, 9 times, 2018-2021 earnings compound growth rate of 18%, the company relies on cost advantages to improve the marketThe share is based on quantity supplementation + cost control to ensure profitability. The target PE in 2019 is 20 times and the target price is 74.

6 yuan / share, 28% of the target space, maintain BUY rating.

Risk warning: PV demand exceeds expectations; Xinjiang has introduced self-provided cross-substitution.