Event: The company releases the 2021 semi-annualPerformancePre-increaseannouncement, Expected to return to mother in 2021H1Net profit2.8~3 billion yuan, a year-on-year increase of 177%~197%; it is expected to achieve a net profit of 2.8~3 billion yuan, a year-on-year increase of 192%~213%.
The tight supply of silicon materials combined with the large-scale expansion of silicon wafers has led to high prices in 2021H1, and high profitability of silicon materials; solar cells are fully produced and sold, but profitability is relatively under pressure.
The price increase of silicon materials in 2021H1 significantly exceeded market expectations. According to PVInfoLink data, the price of silicon materials at the end of June 2021 will remain in the range of 200~215 yuan/kg, which is an increase of more than 135% compared with the price of 85 yuan/kg at the beginning of the year. We expect the company to 2021Q2 The average sales price of silicon materials including tax falls in the range of 130-140 yuan/kg; the company’s high-purity crystalline silicon business is fully produced and sold, and we expect shipments of about 48,000 tons in 2021H1; in the context of significant growth in the volume and price of silicon materials, The company’s earnings have achieved substantial growth. On the other hand, under the background of high silicon material prices, the company’s cell business costs are under greater pressure, but with the company’s excellent cost control capabilities and industry-leading cell quality advantages, the company’s cell business still maintained full production in the first half of the year. Full sales, volume and profit achieved a substantial year-on-year growth.
Continue to increase production of silicon materials, leading cost control capabilities in the context of performance is expected to maintain high growth. The company announced on July 1 that it intends to invest 14 billion yuan to build a 200,000-ton high-purity crystalline silicon project in Leshan City; the project will be implemented in two phases. The first-phase investment is expected to be 7 billion yuan (an annual output of 100,000 tons), which is planned for 2022. It will be put into production before the end of December, and the second phase of the project will start at an opportunity based on the market and the development of the photovoltaic industry. Under the background of carbon neutrality, the company has once again increased its silicon material production capacity. After the first phase of the project is put into production, the company’s silicon material production capacity will reach 330,000 tons by the end of 22, and the company’s 2023 development plan has been completed ahead of schedule (the original plan to achieve silicon material production capacity 22 ~290,000 tons); Although the supply and demand situation of silicon materials is expected to improve in the second half of 22, which will drive silicon material prices into a downward channel, the company’s industry-leading cost control capabilities will still ensure that the company’s future performance will maintain high growth.
Maintain the “Buy” rating: The rise in silicon material prices in the first half of 2021 has exceeded our expectations and significantly exceeded market expectations; and we judge that the supply and demand situation of silicon materials has not changed significantly, although silicon material prices may fluctuate in the short term However, it will remain relatively high; according to the silicon material price situation and the company’s new silicon material expansion plan, we will increase the company’s 21-23 yearprofit predictionIt is estimated that the company will realize a net profit of RMB 79.76/108.73/11.630 billion (up 45%/up 50%/up 34%) in 21-23 years, corresponding to EPS 1.77/2.42/2.58 yuan, and the current stock price corresponds to 21-23 years PE is 24/18/17 times. As the absolute leader in silicon materials, the company is leading the industry in its expansion pace, and its market share will further increase in the future. The layout of large-size cells/modules is also expected to bring additional growth to the company’s profitability. Maintain a “buy” rating.
Risk warning: The installed capacity of the photovoltaic industry is less than expected; the company’s production capacity and product sales are less than expected; the price war for overcapacity is more intense than expected; the company chose the wrong technology route or the capacity expansion cannot keep up with the trend.
(Article Source:Everbright SecuritiesCo., Ltd.)
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