Event

Beijing Express publishes semi-annual report 2021

According to the semi-annual report released by Beijing Express in the first half of 2021, the company achieved operating income of 2.351 billion yuan in the first half of 2021, an increase of 36.66 percent over the same period last year, and a net profit of 455 million yuan, an increase of 98.69 percent over the same period last year, corresponding to an EPS of 0.19 yuan. At the same time, the company realized a net profit of 429 million yuan in the first half of the year, an increase of 101.91% over the same period last year.

Brief comment

Wuhai project capacity release, boost new materials business revenue by 67%. As of the first half of the year, the company's new materials industrial park project in Wuhai, Inner Mongolia, has an existing pull rod capacity of about 8.5GW, and the production capacity has continued to be released steadily, driving the company's new materials business revenue to increase by 67% over the same period last year to 1.227 billion yuan. At the same time, although the price of silicon material rose somewhat in the first half of this year, the silicon wafer link maintained a gross profit margin of more than 30% with the high bargaining power of the leading manufacturers. In addition, the company closely follows the development direction of the market, wafer products have been upgraded across the line, and large wafers of 182mm and 210mm sizes have been shipped in bulk.

Leshan Phase I project is put into production, and the company's silicon wafer production capacity is expected to increase rapidly in the future. The total investment of the Leshan project is 7 billion yuan, which will be implemented in two phases to build a 24GW single crystal crystal pulling and slicing project. The first phase of production capacity 12GW, mainly using the company's advanced production equipment, supporting the use of Beijing Express 1600 single crystal furnace drawn silicon rod, suitable for 210mm size. On June 23, the first phase of the Leshan project was officially ignited and put into production, and the first single crystal silicon rod was successfully produced on July 14, which means that the whole project has shifted from the civil construction stage to the trial production stage. In addition, the company currently has Wuhai Phase II (10GW) and Leshan Phase II (12GW) projects under construction, and the new capacity is 210mm size, and the company's wafer production capacity will be further increased after subsequent production.

New energy power plant business contributes to stable cash flow

By the end of June, the cumulative installed capacity of the company's grid-connected photovoltaic power station is 1248.09MW, the installed scale of the handwind power station is 148.5MW, and the total amount of scenery is 1396.59MW. In the first half of the year, the company's photovoltaic power station realized a total of 688 million kilowatt-hours of settlement electricity, and the wind power station realized a settlement of 152 million kilowatt-hours, driving the steady improvement of the electricity scale of the company's new energy power generation business. In the first half of the year, the revenue of the power generation business reached 754 million The business gross profit margin is 59%, and it continues to contribute stable cash flow to the company, which can provide sufficient ammunition for the company's production expansion under the trend of rapid growth of photovoltaic new materials business in the future.

Maintain Beijing Express's "buy" rating

The company currently has a large wafer production capacity under construction. After Leshan Phase I project is put into production, the company's wafer production capacity will reach 20GW. In the future, after Leshan Phase II and Wuhai Phase II are gradually put into production, the company's wafer capacity is expected to increase to 42GW. We estimate that from 2021 to 2023, the company will achieve operating income of RMB 89,251,8365 million, net profit of RMB 9.84pm, and net profit of RMB 1.982 million, respectively, and the corresponding pre-PE will be 13.93 times of 28.05pm and 17.72max, respectively, maintaining the company's buy rating.

Risk tips: increased competition in the wafer industry; silicon prices remain high leading to a decline in wafer gross profit margin; downstream installation demand is lower than expected.