Home » CITIC Securities: Maintain Xinte Energy (01799) with a “Buy” rating and a target price of HK$35_Oriental Fortune Network

CITIC Securities: Maintain Xinte Energy (01799) with a “Buy” rating and a target price of HK$35_Oriental Fortune Network

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  CITIC Securitiesreleaseresearch reportsay, maintainXinte Energy(01799) “Buy” rating, 2021performanceIn line with expectations, the continuous rise in the price of silicon materials has boosted profitability significantly, and the power station development and operation business continued to increase profits. The EPS forecast for 2022-24 was adjusted to 5.97/5.46/4.98 yuan (equivalent to 7.07/6.48/5.91 Hong Kong dollars), the current price Corresponding to PE2/3/3 times, based on 5 times PE in 2022, the target price is HK$35.

  CITIC SecuritiesThe main points are as follows:

  The performance was basically in line with expectations, and the continuous price increase of silicon materials drove a substantial increase in profit.

Company to achieve in 2021Operating income22.523 billion yuan (+58.8%YoY, after adjustment), attributable to the parentnet profit4.955 billion yuan (+680.9%YoY, after adjustment), consolidated grossinterest rateUp to 41.3% (+24.1pctsYoY, after adjustment), the performance is basically in line with expectations, mainly due to the increase in the volume and price of the polysilicon business, the profitability has increased significantly, and the scale of the highly profitable power station BOO business continues to increase.

  The profitability of silicon materials has increased significantly, and the price of raw materials such as metal silicon has driven up costs.

The company’s polysilicon revenue in 2021 will increase to 11.576 billion yuan (+158.8% YoY, after adjustment), grossinterest rateIt rebounded to 58.7% (+41.7pctsYoY, after adjustment), benefiting from the sharp rise in the price of silicon materials, the company’s profitability has rebounded significantly. The company’s silicon material output in 2021 will reach 78,200 tons (+20.3%YoY). Considering the adjustment of downstream silicon wafer companies’ inventory and purchasing strategies at the end of the year, the estimated shipment volume may be around 75,000 tons, corresponding to single-ton ASP and cost or respectively. 154,000 yuan and 64,000 yuan, of which the increase in cost was mainly due to the sharp rise in the price of metal silicon, the general increase in the cost of trichlorosilane and electricity prices, and the under-production of production capacity during the technical renovation of the production line.

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  The expansion of silicon material production capacity is accelerating, and the profit and share advantages are expected to be further strengthened.

The company currently has an effective production capacity of 67,000 tons of silicon materials. The bank expects that the technological transformation project of its old production line in Xinjiang will be completed in April 2022, and the annual production capacity will reach 100,000 tons;JinkoSolarandJA Technology9%) is expected to be gradually put into production and climbing in 2022H2. The bank expects that the production capacity of Xinjiang and Inner Mongolia will contribute about 90,000 tons and 25,000 tons respectively (total 115,000 tons) in 2022. In the case of tight supply of silicon materials, it is expected that The continuation volume rose sharply. also,Company AnnouncementIt plans to issue no more than 300 million A-shares to raise funds for the construction of a 200,000-ton polysilicon project in Zhundong, Xinjiang. Up to 30/400,000 tons, the market share, product quality and production cost advantages are expected to be further strengthened.

  We have abundant reserves of new energy parity projects and continue to expand the development of new energy resources.

In 2021, the company has newly obtained a grid parity project index exceeding 4GW, and achieved a new breakthrough in the field of energy storage projects. The company has completed an installed capacity of about 2.3GW of photovoltaic wind power projects, and achieved a power station development business income of 7.761 billion yuan (+5.1%YoY, after adjustment), corresponding to gross Interest rate 13.2% (+0.8pctYoY, adjusted). The company plans to continue to promote the development of new energy projects in 2022, with a target installed capacity of 2-2.5GW, optimize system design and supply chain management, and achieve optimal power generation costs throughout the life cycle.

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  The centralized grid connection of wind power projects has boosted the operation scale of power stations, and the profit of BOO business has increased significantly.

At the end of 2021, the company has an installed capacity of 2.2GW (+165%YoY) of wind power and photovoltaic power plants in operation, with an annual electricity fee income of 1.874 billion yuan (+111.2%YoY, after adjustment), and a gross profit margin of 68.7% (+7.6pctsYoY, After adjustment), the significant increase in profitability may be mainly due to the fact that after the rush to install onshore wind power in 2020, wind farm projects with higher yields in 2021 will be connected to the grid one after another, contributing to the increase in electricity fee income. The company plans to continue to promote the operation scale of self-sustained new energy power stations, and the installed capacity is expected to continue to increase to 2.5-3GW by the end of 2022, contributing to an important increase in performance.

  Investment Advice:Based on the higher-than-expected rise in silicon material prices and the accelerated progress of the company’s production expansion, the bank raised its 2022/23 net profit forecast to 8.54/7.81 billion yuan (the original forecast value was 6.43/6.46 billion yuan), adding a new 2024 net profit The forecast is 7.12 billion yuan, the corresponding EPS forecasts are 5.97/5.46/4.98 yuan (equivalent to 7.07/6.48/5.91 Hong Kong dollars), and the current price corresponds to 2/3/3 times the PE. Combined with the valuation of comparable companies in the polysilicon industry (10-15 times in 2022), and considering the obvious discount of polysilicon companies in the Hong Kong stock market, based on 5 times PE in 2022, the company’s target price is HK$35, and the “buy” rating is maintained.

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  Risk factors:The growth of photovoltaics was lower than expected; the release of silicon material production capacity was lower than expected; the price of silicon material dropped sharply.

(Article source: Zhitong Financial Network)

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