The current situation of the company
According to the March 4 notice of China Investment Information Co., Ltd., the adjustment of the company's shares to Hong Kong Stock Connect will take effect from the next trading day of Hong Kong Stock Connect (March 7).
Comment
The main business refocuses on silicon, and the operation is full of vitality. By the end of 2021, the scale of the company's transportation and power station has been reduced from about 5 gigawatts at the end of 2020 to about 1 gigawatts, focusing on the main business of polysilicon. On February 21, the company announced the appointment of Mr. Lan Tianshi, the current chairman and general manager of Jiangsu Zhongneng, as the executive director and associate CEO of the company.
The construction of granular silicon production capacity was carried out as scheduled. Since the first fluidized bed was put into production in November, 6 fluidized beds have been put into production using the previous Yingxi announcement guidelines to achieve full production, which is in line with the expectations given by the public Yingxi announcement in 2021. Capacity climbing will continue. We expect the company to hold 30,000 tons (Xuzhou) / 220000 tons (60,000 tons each of Xuzhou, Baotou and 100000 tons of Leshan) / 300000 tons (100000 tons of Xuzhou, Baotou and Leshan each) by the end of 2021-22-23. Pay attention to the climbing of new capacity and the progress of downstream wafer factory verification.
Domestic and foreign photovoltaic policies and fundamental resonance drive the continuation of the silicon boom, creating development opportunities for the company. Domestically, we are optimistic that photovoltaic capacity will increase by 45% to 80GW in 2022. Recently, the Energy Bureau has stressed the promotion of the construction of large-scale wind photovoltaic bases focusing on desert, Gobi and desert areas, and the superimposed distributed county is in full swing. Domestic photovoltaic demand reserves are sufficient. Overseas, we are optimistic that photovoltaic installed capacity will increase by 30% to 140GW in 2022; under the conflict between Russia and Ukraine, the fluctuation of overseas traditional energy supply has increased, and the new photovoltaic energy is more economical and safer, and the installed capacity is expected to be speeded up. For example, Germany's new planned target for photovoltaic installed capacity by 2030 is 200GW, which corresponds to an average annual increase of more than 15GW installed in the future, which is nearly three times that of 2021. In the context of strong demand, since January 2022, silicon prices have maintained high market expectations, the current price is 240 + yuan / kg, we expect the supply and demand of silicon links in 2022 to continue, the annual average price may reach more than 180 yuan / kg, tight supply is also expected for the company's granular silicon technology large-scale production expansion, product quality improvement, and downstream verification import to provide development opportunities.
Profit forecast and valuation
Keep earnings forecasts for 2021, 22 and 23 unchanged, outperform industry rating and target price of HK $3.70, with 26% upside compared to current stock price, which corresponds to 2022 9.8x/9.4x PE 2023 and target price 12.4x / 11.94x PE in 2022.
Risk.
The downstream demand is not as expected, the production expansion progress is not as expected, and the production safety risk.