Main points of investment
The profits of the company's three main businesses increased significantly, and the performance was in line with the expected 2022H1. The company achieved a total operating income of 4.638 billion yuan, an increase of 95.46% over the same period last year, a net profit of 231 million yuan, an increase of 642.89% over the same period last year, and a sales gross profit margin of 16.63%, an increase of 6.16pct over the same period last year. During the reporting period, the company's operating conditions and market expansion are good, photovoltaic application systems, photovoltaic backplanes, battery modules and other main business performance have achieved substantial growth.
The capacity of photovoltaic backplane is expanding steadily, and the profit level is greatly improved.
In the first half of 2022, the company's photovoltaic backplane business achieved operating income of 1.354 billion yuan, an increase of 67.93% over the same period last year, and a gross profit margin of 25.88%, an increase of 7.30pct over the same period last year. During the reporting period, the company's sales of double-sided coated backplane products increased steadily, and single product shipments increased by about 140% compared with the same period last year. The company's 50 million square meters of backplane production capacity is planned and gradually released, and it is expected that 220 million flat backplane capacity will be formed by the end of 2022. At the same time, the company plans to further expand the annual production capacity of 250 million square meters, and the total production capacity is expected to exceed 470 million square meters in 2025.
TOPCon battery has outstanding first-mover advantages, and component profits improved significantly in the first half of 2022. The company's efficient components business achieved operating income of 1.066 billion yuan, an increase of 46.05% over the same period last year, a gross profit margin of 3.93%, an increase of 8.43pct over the same period last year, and a change from negative to positive. Component part, during the reporting period, the company realized component output 1.5GW, sales volume 548MW (excluding self-use), and production capacity 1.6GW at the end of the reporting period. In the battery part, during the reporting period, the company produced high-efficiency battery mainly for component production, and the production capacity of N-type TOPCon battery advanced rapidly. Taizhou 1.5GW completed the capacity climbing during the reporting period, with a total actual capacity of 3.6GW in Taizhou; the first phase of Shanxi 16GW high-efficiency battery project was put into production in June 2022, and the first phase of follow-up 4GW and the second phase of 8GW are gradually under planning and construction.
The photovoltaic system business has expanded rapidly and has long-term growth potential. In the first half of 2022, the company's photovoltaic application business realized business income of 2.184 billion yuan, an increase of 181.32% over the same period last year, and a gross profit margin of 16.89%, an increase of 2.42% over the same period last year. During the reporting period, Zhonglai Minsheng delivered 656.97MW household photovoltaic power station to Shanghai Yuanye, and signed cooperation framework agreements with 110 cities / counties / towns, with a proposed capacity of about 10.75GW, which will support the sustainable development of business in the future.
Profit forecast and valuation
The company is the leader of backplane and TOPCon battery, and the photovoltaic system business is rapidly increasing. We estimate that the return net profit of the company from 2022 to 2024 is 608 million yuan, 1.053 billion yuan and 1.562 billion yuan respectively, corresponding to EPS 0.56,0.97,1.43 yuan per share respectively, and the corresponding PE valuation is 32,19,13 times respectively.
Risk Tips:
Photovoltaic installation is not as expected; the price of raw materials is rising; the company's production expansion progress is not as expected.