Hoshine Silicon(603260) 华创证券·2024-11-13 14:42Investment Rating - Strong Buy (Maintained) with a target price of 81.9 RMB, compared to the current price of 62.25 RMB [1] Core Views - The company's cost advantage has helped it maintain a high external sales rate despite weak supply and demand in the industrial silicon market [2] - The company's industrial silicon capacity is 1.22 million tons, with Q3 production of 480,400 tons and sales of 345,100 tons, of which 70% were external sales [2] - The average price of industrial silicon in Q3 was 10,600 RMB/ton, down 7.68% QoQ [2] - The company's self-owned power plant capacity provides a cost advantage, allowing it to maintain a high external sales rate of 71.8% in Q3 [2] - Organic silicon production and sales continue to increase, while polysilicon production and sales need recovery [2] - The company is expanding its capacity in the photovoltaic and polysilicon sectors, with several projects under construction, including a 200,000-ton high-purity polysilicon project and a 20GW photovoltaic module project [2] - The company is expected to benefit from the recovery of the industrial silicon and polysilicon markets, with projected net profits of 2.149 billion RMB, 3.223 billion RMB, and 4.536 billion RMB for 2024, 2025, and 2026, respectively [2] Financial Performance - Revenue for the first three quarters of 2024 was 20.371 billion RMB, up 2.44% YoY [1] - Net profit attributable to shareholders was 1.454 billion RMB, down 33.42% YoY [1] - Q3 revenue was 7.099 billion RMB, down 10.68% YoY and 9.63% QoQ [1] - Q3 net profit attributable to shareholders was 476 million RMB, up 18.42% YoY and 5.82% QoQ [1] - Q3 non-GAAP net profit was 416 million RMB, up 20.86% YoY and 9.62% QoQ [1] Industry and Market Outlook - The industrial silicon market is expected to recover in Q4 due to the dry season, with the company likely to benefit the most as a market leader [2] - The company's organic silicon business is performing well, with sales of key products increasing QoQ, despite a general downturn in the industry [2] - The polysilicon market is expected to recover as photovoltaic production increases in Q4 [2] - The company is expanding into high-growth sectors such as silicon materials, photovoltaic glass, and silicon carbide, which are expected to drive future growth [2] Valuation and Projections - The company's 2024-2026 net profit projections have been revised to 2.149 billion RMB, 3.223 billion RMB, and 4.536 billion RMB, respectively, reflecting a YoY growth rate of -18.1%, +50.0%, and +40.7% [2] - The company's 2025 P/E ratio is estimated at 30x, supporting the target price of 81.9 RMB [2]