Hoshine Silicon(SH:603260) Changjiang Securities·2024-05-20 08:32Investment Rating - The investment rating for the company is "Buy" and is maintained [4][6]. Core Views - The company achieved a revenue of 26.58 billion yuan in 2023, representing a year-on-year increase of 12.4%. However, the net profit attributable to shareholders was 2.62 billion yuan, a decrease of 49.1% year-on-year, and the net profit after deducting non-recurring gains and losses was 2.19 billion yuan, down 56.8% year-on-year [5][6]. - In Q4 2023, the company reported a revenue of 6.70 billion yuan, an increase of 24.5% year-on-year but a decrease of 15.7% quarter-on-quarter. The net profit attributable to shareholders for the same quarter was 440 million yuan, down 26.2% year-on-year but up 8.9% quarter-on-quarter [5][6]. - For Q1 2024, the company recorded a revenue of 5.42 billion yuan, a decrease of 5.5% year-on-year and a decrease of 19.1% quarter-on-quarter, with a net profit of 530 million yuan, down 47.4% year-on-year but up 20.4% quarter-on-quarter [5][6]. Summary by Sections Financial Performance - The company’s main products, industrial silicon and organic silicon, faced pressure due to increased competition and a downward trend in the market. Sales volumes for industrial silicon, 110 raw rubber, 107 raw rubber, mixing rubber, and cyclic siloxane in 2023 were 101.7, 34.1, 30.6, 9.3, and 10.2 thousand tons respectively, with year-on-year increases of 74.2%, 69.7%, 47.3%, 35.2%, and 5.0%. However, average prices decreased by 24.4%, 33.7%, 35.4%, 38.2%, and 38.4% respectively [5][6]. - The gross margin and net margin for 2023 were 20.1% and 9.7%, down 14.2 percentage points and 12.0 percentage points year-on-year [5][6]. Market Outlook - In Q1 2024, organic silicon prices showed signs of recovery, with the average price of domestic organic silicon raw rubber rising to 16,851 yuan per ton, an increase of 13.1% quarter-on-quarter. This recovery is expected to continue as downstream demand improves and some outdated production capacity is eliminated [6][7]. - The company is recognized as a global leader in the silicon-based industry, with a complete industrial chain and significant scale advantages. The company has made breakthroughs in silicon carbide technology and is advancing various projects, including coal-electric-silicon integration projects and photovoltaic component production [6][7]. Future Projections - The company is expected to maintain its position as a cost leader in industrial silicon and organic silicon, with growth opportunities in the photovoltaic sector. Projected net profits for 2024, 2025, and 2026 are 2.84 billion, 4.02 billion, and 5.02 billion yuan respectively [6][7].