Tongwei (600438): The performance of the silicon material & battery double faucets has grown steadily
Investment Highlights Performance Summary: The company achieved operating income of 161 in 2019H1.20,000 yuan, an increase of 29 in ten years.4%, net profit attributable to mother 14.50,000 yuan, an increase of 58 in ten years.0%, net of non-return to mother’s net profit 13.90,000 yuan, an increase of 55 in ten years.7%.Net cash flow from operating activities improved significantly, with 19H1 being 11.1 ppm, an increase of 62 in ten years.8%.Q2 achieved revenue of 99.60,000 yuan, an increase of 37 in ten years.5%, net profit attributable to mother 9.6 ppm, an increase of 60 in ten years.5%. The maximum capacity of battery cells has continued to be high, and the current price is at the bottom: the average capacity utilization rate of the battery business of the combined company is reported to be around 100%. The monthly capacity utilization rate of the newly-built production line has exceeded 110% and has continued to increase.With the continuous optimization of process level and management efficiency, it is expected that the maximum internal production capacity will exceed 120%, and the capacity integration that far exceeds the industry average reflects the competitive advantage of the company’s products.: Because of 6?The capacity of PERC was released rapidly in August, and domestic demand will only be fully activated in September. The short-term supply and demand mismatch caused the price of monocrystalline PERC cells to drop rapidly. At the current price level, most companies are already in a state of substitution.The starting price will enter the recovery channel. In the second half of the year, the company’s silicon materials will usher in a comprehensive improvement in volume, price and cost, and its profitability will be significantly improved: (1) Volume: In the first half of the year, the silicon material replacement volume will be about 2.2 emissions, of which 50% of new and old capacity are delivered. The new capacity is only affected by the capacity climb and the Baotou accident. Only 30% of the capacity will be released, and the capacity will be fully released in the second half of the year. The volume is expected to reach twice 青岛夜网 that of the first half;(2) Price: In the first half of the year, the company’s average single crystal ratio was only about 40%, and in the second half of the year, it is expected to increase to 70% +. In the case of single crystal material prices much higher than polycrystalline materials, the company’s average lowest unit price in the second halfSignificant improvement; (3) Cost: Depreciation cost accounts for 20% of the cost of transition raw materials?25%. In the first half of the year, the new production capacity was affected by the climb, and the capacity utilization rate increased the production costs. In the second half of the year, as the capacity is increased, the production costs will further decline. The capacity of silicon materials and battery chips is rapidly expanding, and the scale advantage is obvious: at the end of the continuous reporting period, the company’s silicon materials have formed 8 capacity, and the battery chips have formed 12GW capacity, ranking the second and first in the world respectively.  In March 2019, the company launched the fourth phase of Chengdu and the first phase of Meishan. It is expected that the company’s solar cell scale will reach 20GW by the end of 2019, which will further increase the concentration of the industry and consolidate the company’s scale advantage in solar cell scale.The gradual release of new production capacity of silicon materials and cells will significantly reduce the average production cost in 19 years and help the company’s performance growth. The size of the power station continued to grow steadily: As of 19H1, the installed capacity of the company’s power station has reached 1390MW, and the power generation in 19H18.200 million degrees, corresponding to income 5.100 million, a 90% increase in ten years +.The company has been practicing the “543” cost strategy for many years. Through design optimization and technological innovation, the current comprehensive investment cost of the project has dropped from 6-7 yuan / W two or three years ago to about 4 yuan / W.The company is currently in the process of parity projects of about 800MW +, bidding projects of 500MW +, expected 19?The scale of power generation in 20 years will continue to grow steadily. R & D investment continued to increase: the company’s R & D investment4 in 19H1.60,000 yuan, an increase of 86 in ten years.0%.Under the continuous R & D funding, the company’s average production efficiency for monocrystalline PERC cells is currently 22.3%, an increase of 0 earlier.At the same time, the company actively carried out research on mass production of high-efficiency heterojunction batteries. In June 2019, the first heterojunction cell of the company’s first-phase research and development project was successfully rolled off, and the conversion efficiency reached 23%. Profit forecast and rating.It is expected that EPS for 2019-2021 will be 0.80, 0.97, 1.17 yuan, corresponding to PE is 16X, 13X and 11X.The company is a leading manufacturer of photovoltaic materials silicon and dual-swap cells. It is given a 20X conversion for 19 years, corresponding to a target price of 16 yuan, and maintains a “buy” rating. Risk reminder: the risk that the battery price may be difficult to rebound, the domestic demand may start or the risk may be lower than expected.