Report results short-term pressure, photovoltaic battery equipment business is expected to open the company's profit growth curve on the evening of August 29th, 2022, the company released a half-year report on 2022, according to the report, H1 company achieved operating income of 952 million yuan in 2022, an increase of 34.89% over the same period last year. The main reason for the growth is the high prosperity of the photovoltaic industry, the rapid growth of the current business and the acceptance of the contract, and the confirmation of revenue one after another. The net profit of returning to the mother was 38 million yuan, down 29.43% from the same period last year. The main reason for the short-term pressure on homing net profit is that the company is affected by factors such as competition in the component industry and the rise in short-term raw materials and shipping costs, but with the company's entry into the photovoltaic equipment industry, it is expected that the company's profitability will be repaired in the future. The deduction of non-net profit was 29 million yuan, down 39.55% from the same period last year. The company's gross profit margin was 27.10%, down 3.55pct from the same period last year; the net profit rate was 4.45%, which decreased 3.70pct compared with the same period last year. The main reason for the company's low net profit rate is that the company attaches importance to the research and development of new products, and the 2022H1 R & D expense rate reaches 7.95%, which is mainly used for the R & D materials for PECVD prototypes used in HJT and the salary input of researchers; deducting the non-net profit rate of 3.08%, down 3.79pct from the same period last year.

In terms of business share, 2022H1's revenue from photovoltaic module equipment reached 843 million yuan, an increase of 29.29% over the same period last year, accounting for 88.50% of the total revenue, down 3.9pct from the same period last year. The gross profit margin of this part of the business was 26.58%, down 3.05 pct from the same period last year; revenue from other functional equipment and accessories reached 96 million yuan, an increase of 95.0% over the same period last year, accounting for 10.04% of the total revenue, and an increase of 9.97pct over the same period last year. The gross profit margin of this part of the business was 29.39%, down 21.50 pct from the same period last year; if you look at 2022Q2 alone, the company's revenue was 495 million yuan, an increase of 19.08% over the same period last year; and the net profit from home was 10 million yuan, down 63.54% from the same period last year. The gross profit margin was 24.51%, down 3.32pct from the same period last year and 5.40pct from the previous year; the net profit margin was 2.68%, down 4.21pct from the same period last year and 3.67pct from the previous year.

Photovoltaic module equipment veteran player, "core customer + high-strength technology research and development" to build a profitable moat company, as one of the earliest domestic enterprises involved in the solar photovoltaic equipment manufacturing industry, has become one of the few domestic enterprises capable of providing domestic and foreign photovoltaic module production solutions. At present, it can produce a variety of photovoltaic module equipment, such as series welding machine, dicing machine, imbricate machine, tooling machine, etc., and can adapt to many types of components, such as multi-main gate assembly, double glass assembly, imbricated tile assembly and so on. In terms of production technology, the dream "M" series of efficient components and equipment production line, which has been developed for three years, has higher production capacity and assembly packaging technology to adapt to thinner battery sheets and glass. Among them, the electric heating laminating machine can save energy by more than 20%, and the new material can accelerate the curing time under 45min and so on. Compared with the current mainstream 18s production line, the single-line production capacity can be increased by 50% to 1.2GW, driving the assembly production beat into the 12s era, with strong reliability, high precision and high agitation, saving 25% of land and 20% of people under the same output, bringing about a great-leap-forward reform of component production efficiency and cost control.

As of June 2001, the company has served 210 enterprises in the world, accounting for 85% of the global core enterprises of new energy. The cumulative production capacity for the market exceeds that of 170GW equipment, accounting for nearly 40% of the global production capacity. In 2022, the company has signed 2GW, 2.5GW and 500MW component equipment orders with Indian energy giants Adani Solar, Waaree and Turkish component manufacturer HSAEnergy respectively. The high recognition of overseas customers helps the company to establish a stronger brand advantage abroad. For domestic customers, the company cooperates with Longji Green Energy, Jing'ao Technology and other leading enterprises all the year round. In 2021, the company sold 346 photovoltaic module production lines, an increase of 60.19% over the same period last year. With the production technology with "reducing cost and increasing efficiency" as the core and highly recognized by high-quality customers, it is expected that the company's component equipment business will build a profitable moat in the future.

New players of photovoltaic battery equipment, HJT successfully supplies HJT with microcrystalline and amorphous HJTPECVD equipment, Jinneng Technology Company makes use of the accumulation of automation equipment production technology, and actively extends to the field of battery manufacturing equipment. At present, it has developed battery automation equipment, electric injection anti-photovoltaic equipment, screen printing press and other photovoltaic battery manufacturing equipment on HJT battery equipment. In 2020, the company set up a team to research and develop HJTPECVD equipment. The first amorphous HJTPECVD equipment was supplied to Jinneng Technology in 2021, and the average efficiency of the battery sheet has reached 24.38%, and the convergence of the efficiency distribution is very high, and the average efficiency of the optimal batch is 24.55%. In March, 22, the company's first microcrystalline HJTPECVD equipment arrived at Jinneng Technology, which takes HJT battery as a breakthrough point and forms a new HJT battery structure by introducing microcrystalline silicon oxide layer, which can finally make the battery mass production efficiency exceed 25%. So far, the company has achieved the successful delivery of microcrystalline equipment.

According to our estimates, the increment of the global PECVD equipment market for HJT will exceed 20 billion yuan from 2022 to 2025. In the face of the huge market space, the company, as a new player in the industry, will continue to enhance the company's competitive advantage and profitability with the business model of "collaborative development of efficient battery equipment and efficient component equipment".

Investment suggestion

It is estimated that the return net profit of the company in 2023 and 2024 is 237 million yuan and 302 million yuan respectively, corresponding to the current PE of 62X / 48X, which will continue to be recommended.

Risk hint

Macroeconomic downturn, market demand decline; raw material prices fluctuate sharply; photovoltaic industry policy change risk and so on.