Key points of investment
HJT equipment: delivery of the first mass-produced microcrystalline PECVD equipment; N-type battery+component equipment “integrated” leader 1) According to the company's official WeChat account, it took three years of core technology research and development. Recently, the company's first HJT PECVD mass production equipment based on the microcrystal process was successfully delivered. Pilot/mass production level verification is about to be carried out, which is of great strategic significance.
2) Strategic significance: The company began developing HJT PECVD equipment in 2020. In June 2021, the first HJT PECVD entered Jinneng Technology and passed verification. The delivery of this mass production equipment marks the company's HJT equipment (1) from amorphous technology (efficiency 24.5% +) > to microcrystalline (efficiency 25% +) (2) from process verification > to mass production stage (3) from R&D > to a leader in the HJT equipment industry.
3) Layout for “integrated” suppliers of N-type battery+module equipment: The “High-efficiency Battery & High-efficiency Component R&D Laboratory” that the company invested 102 million yuan to build has been completed, and equipment entry and commissioning has begun. It is expected that by the end of 2022, the N-type high-efficiency battery+ module R&D line will be completed, providing a complete platform for R&D and testing of high-efficiency batteries and high-efficiency components. The bottleneck in the industrialization of HJT and TopCon is not only on the battery side; the adaptation of the component side is also a top priority in future development. We judge that the company is expected to form an “integrated” solution capability in N-type battery equipment+component equipment, accelerate equipment development and customer resource collaboration, and has great strategic significance.
Accumulated: PV HJT+ TopCon devices are all moving towards the top, and component equipment leaders will take off for the second time. Jinchen is a scarce target for photovoltaic cell HJT equipment+TopCon equipment. It is expected that both businesses will take the lead (currently HJT equipment leader - Mai is a share, currently TopCon equipment leader - Jiejia Weichuang). The company's performance and valuation are expected to both improve.
1) HJT equipment: moving towards mass production, the industry's potential market value space of 100 billion dollars. (1) Amorphous PECVD: It has been verified by Jinneng and is industry-leading. The average efficiency is 24.4%, and the optimal batch efficiency is 24.55%. (2) Microcrystalline PECVD: The first microcrystalline process chamber has arrived at Jinneng Technology, with a target conversion efficiency of 25% +. The first mass-produced microcrystalline device has been successfully delivered and verified at the pilot/mass production level. We expect the market value of the HJT equipment industry to reach 300 billion yuan (12 billion profit, 25 times PE) in 2025. The company's PECVD equipment has advantages such as high production capacity and low cost, and equipment progress is expected to exceed expectations in supermarkets.
2) TopCon equipment: Successful verification by leading customers, potential market value of 10 billion dollars. The company's tubular PECVD prototype has been tested by customers such as Jingao, Dongfang Risheng, and Jingke. The average efficiency of mass-produced n-type TopCon batteries is > 24% (maximum efficiency 24.5%). We expect the TopCon equipment industry to reach 37.3 billion yuan (1.5 billion profit, 25 times PE) in 2025, and the company will benefit.
3) Component equipment: The component equipment (assembly line+laminator) market is expected to reach 8.9 billion yuan in 2025, and CAGR = 23% in 2021-2025. The company is a leader in component equipment and is expected to grow steadily.
4) Build an intelligent manufacturing base in East China to accelerate business take-off: In 2021, the number of employees in the company's main subsidiaries (mainly in Suzhou) reached 1,155, accounting for 83% of the company's total number of employees. In the future, as the company's intelligent manufacturing base in East China is gradually put into operation in Suzhou, taking advantage of the supporting advantages of the industrial chain in Jiangsu and Zhejiang regions, it will help the company accelerate its take-off in the field of photovoltaic cell/module equipment.
Profit forecast: Optimistic about the company's photovoltaic HJT and TopCon equipment leading the way. The company's net profit for 2022-2024 is expected to be 1.4/2.3/41 billion yuan, an increase of 124%/66%/80% over the previous year, and the corresponding PE is 116/70/39 times. We estimate that if the company is in third position in both HJT+TopCon devices, the potential market capitalization space is 30.5 billion yuan in 2025; if both are in second position, the potential market value is expected to reach 57.5 billion yuan in 2025. Maintain a “buy” rating.
Risk warning: The pace of HJT/TopCon battery equipment is not as fast as expected; downstream production expansion falls short of expectations.