Main points of investment:
On August 4, 2022, Zhonglai Co., Ltd. announced its 22-and-a-half annual report that the company achieved a total operating income of 4.638 billion yuan in the first half of 2022, an increase of 95.46% over the same period last year, and a net profit of 231 million yuan, an increase of 642.89% over the same period last year.
In 22 years, Q2 achieved operating income of 2.628 billion yuan in a single quarter, an increase of 30.8% over the previous quarter. Q2 achieved a net profit of 142 million in a single quarter, an increase of 60.35% over the previous quarter. In the first half of 22, the business conditions of all business sectors of the company continued to improve, and the company's performance increased greatly.
TOPCon battery and module business: the profitability of TOPCon components has improved significantly, and gross profit margin has changed from negative to positive. In the first half of 22, the company's output of TOPCon components was 1.5GW, in which external sales 548.01MW was realized, and 549.71MW was provided to subsidiaries within the scope of merger. Taizhou Zhonglai made a profit of 41.33 million for single report and about 0.04 yuan for single tile components.
In the first half of the year, the company's external sales revenue of high-efficiency components was 1.066 billion, and the gross profit margin was 3.93%. Compared with the same period last year, + 8.43pct, the gross profit margin changed from negative to positive, and the company still achieved a positive gross profit in the face of rising upstream silicon wafer prices.
At present, the company's TOPCon battery capacity is 3.6GW and component capacity is 3.5GW. With the gradual climbing and production of Shanxi 4GW TOPCon battery project, the profitability of the company's efficient component plate is expected to gradually improve, and shipments will also continue to increase. It is expected that high-efficiency components will ship 5GW in 22 years.
Photovoltaic backplane business: the operation of the backplane business is bright in the first half of 22 years, realizing the rise of volume and profit. In the first half of 22, the company's photovoltaic backplane is expected to ship about 120 million square meters, with an average monthly shipment of 2000 square meters. At present, the company's annual production capacity is 170 million square meters, and the capacity utilization rate in the first half of the year is over 140%. From January to June 22, the company's backplane business achieved an operating income of 1.354 billion, an increase of 67.93% over the same period last year, with a gross profit margin of 25.88%, a year-on-year + 7.3pct, leading the industry. At present, the company is actively carrying out the capacity expansion of the backplane business. It is expected that 5000 million square meters of rice will be put into production in the third quarter of 22, the nominal production capacity will reach 220 million by the end of 22, and shipments for the whole year of 22 are expected to exceed 240 million square meters, higher than the previous expected level. the company's backplane leader position is solid.
Photovoltaic application system: steady, in-hand project super 10GW, shipments in line with expectations. In the first half of 22, due to the epidemic, the company's distributed business was affected to a certain extent, but in the first half of the year, 656MW MagneQ Q2 was still installed about 350MW in a single quarter. From January to June of 22, the company's photovoltaic application system achieved business revenue of 2.184 billion, an increase of 181.32% over the same period last year.
As of June 30, 22, the company has signed cooperation framework agreements with 110 cities / counties / towns, with a proposed capacity of about 10.75GW, sufficient existing projects to provide a strong guarantee for installation in the second half of 22, and it is expected that distributed installation will reach 3GW for the whole year of 22.
Investment analysis opinion: the company is the photovoltaic backplane leader, TOPCon leader, distributed head enterprise, the company has been out of the predicament, profitability has been gradually improved, performance continues to cash. To maintain the company's profit forecast, it is estimated that the homing net profit in 22-24 is 6.86,10.3 and 1.3 billion yuan, and the EPS is 0.63,0.95,1.19 yuan per share, respectively. At present, the stock price corresponds to 27 times, 18 times and 14 times of PE, respectively. The current valuation belongs to the lower level of the industry and maintains the company's "buy" rating.
Risk hint: the global installation is not as expected, the release of new capacity is not as expected, and the risk of rising raw material prices.