The company recently announced the “Notice Concerning the Company's Daily Related Transaction Quota Forecast in 2022", which includes the tax-inclusive procurement amount for the related party Xi'an Longji Green Energy Construction Technology Co., Ltd. (hereinafter referred to as Longji Green Energy Construction, the company's second largest shareholder, Longji Co., Ltd., 601012.SH, wholly-owned Sun Company), is estimated to be 2.5 billion yuan in 22 (versus the amount incurred in '21 was 0.008.6 billion yuan). We believe that the scale of this related transaction shows that the company is well prepared for large-scale expansion of the BIPV business and has set initial targets, exceeding the market and our early expectations.
The company also recently announced that it has received Xinhuadu Industrial Group Co., Ltd. (002264.SZ, which is mainly engaged in the chain operation of hypermarkets, supermarkets and department stores) and its co-actors recently increased the share of the company's shares held to 5.20% through centralized bidding and other methods. We believe this incident reflects that industrial capital has strong confidence in the company's development prospects.
BIPV business in '22 or reinvent “Two Centres”
We speculate that the raw materials purchased by the company from the associated company Longji Green Energy Construction are BIPV components. Referring to the recent BIPV tender price of about 2.0 yuan/W, the related procurement scale of 2.5 billion yuan in '22 corresponds to about 1.25 GW. Also, referring to the BIPV system construction cost of about 5.0 yuan/W in '20, Sent Co., Ltd. is a BIPV system solution provider, and the related procurement scale corresponds to the company's revenue of about 6.25 billion yuan. We think this may be a guide for the company's BIPV business expansion in '22. It is roughly equivalent to reinventing “Two Centres” from a revenue perspective by relying on BIPV incremental business
(Note: The company's 20FY revenue scale is 3.15 billion). On the other hand, due to the lack of relevant engineering case data, the profit margin of this business is relatively difficult to estimate; considering that core cost factors such as components and inverters require collaborative support from Longji, we expect that the profit margin of the BIPV business may be lower than the profit margin of the company's traditional business.
Policy warm winds blow frequently, optimistic about the future of distributed photovoltaics
The 21Q1-3 national photovoltaic power generation operation situation announced by the National Energy Administration on 21/10. China added 25.56 GW of photovoltaic grid-connected capacity during the same period, of which the centralized/distributed type was 9.15/16.41 GW respectively, and distributed accounted for 64.20% (versus distributed accounted for 33.8% of China's cumulative photovoltaic installations at the end of 21Q3). In the context of high pressure on component raw materials in '21, distributed photovoltaics development showed strong pressure capacity (we think it stems from better unit investment costs, while owners' sensitivity to prices is less sensitive to prices) . 21/06 The National Energy Administration officially issued the “Notice Concerning Submission of the Pilot Plan for Rooftop Distributed Photovoltaics throughout the County (City, District)”
(Hereafter referred to as county-wide promotion), showing the importance attached to the policy's recognition and promotion of distributed photovoltaics prospects, the whole county's promotion may be an important starting point for achieving the “14th Five-Year Plan” installation plan. 2021/10, the State Council issued the “Action Plan to Reach Carbon Peak by 2030”, which clearly accelerates the promotion of integrated applications of photovoltaic power generation and buildings, and proposes that the PV coverage rate of newly built public institution buildings/factory buildings in 25 years be striving to reach 50%; the policy is heating and wind, and we remain optimistic about the future pace of BIPV development.
Raise the profit forecast for 22/23, continue to be optimistic about the company's second growth prospects, maintain that the “increase in holdings” rating company and Longji Green Energy Construction related transaction scale reflects the company's confidence in BIPV development in '22 and thereafter, maintain the company's performance forecast of 150 million in '21, and raise the company's 22/23 company performance forecast to 42/690 million (previous value of 27/460 million). The current price corresponds to the company's PE 60x in '22. At the same time, we are optimistic about the company's second growth prospects. At the same time, we believe that the company's second growth prospects are worth looking forward to. At the same time, the company's second growth prospects are worth looking forward to. The large increase in industrial capital production supports the securities industry Logic, continue to maintain the “increase in holdings” rating.
Risk warning: New orders are lower than expected, repayment risks, and cooperation with Longji is less effective than expected