Main points of investment:

The company's main products continue to iterate to consolidate competitive advantage, the main business profitability repair. The company was founded in 2008, after more than 10 years of development, the company has completed the photovoltaic backplane as the basis, focusing on the development of efficient cells and components, and accelerating the strategic transformation of photovoltaic application system business. focus on the distribution of household distribution and photovoltaic rural revitalization and other business direction. In the first half of this year, the gross profit margin of the company's three major business sectors, namely, efficient components, photovoltaic application system and backplane, all improved compared with the same period last year, the company's overall gross profit margin became positive, and its profitability was significantly repaired.

Photovoltaic industry to maintain a high boom, backplane business leapt to the leading position. According to IRENA, by 2030, the global installed capacity of photovoltaic will be close to 5221GW; by 2050, the installed capacity of photovoltaic will exceed 14036GW, and the global photovoltaic industry will remain high in the future. The company's backplane sales volume reached 168 million square meters in 2021, an increase of 31% over the same period last year, and the production and sales rate reached 100.3%. The company's backplane business developed rapidly, with full production and sales, leaping to the leading position in the industry. In the first half of this year, the company's backplane business income increased by 68% compared with the same period last year. Continue the high growth trend, will continue to benefit from the high prosperity of the industry.

Active distribution of domestic distribution, battery efficiency to meet a breakthrough, overseas business development smoothly. Domestic distributed photovoltaic continues to develop rapidly this year. From January to September 2022, the newly installed capacity of domestic distributed photovoltaic reached 35.33GW, a year-on-year increase of 115.3%. By the end of June this year, the proposed capacity of the company's distributed photovoltaic project has reached about 10.75 GW dome 2022H1 household photovoltaic power stations that have been accepted and delivered nearly for the whole of 2021. At the end of 2021, the mass production efficiency of the 1.5GWN TOPCon battery production line newly put into production in Taizhou can reach 24.5%. Recently, the mass production efficiency of the latest batch of TOPCon batteries produced in Shanxi has reached 24.8%, which is another breakthrough. In 2021, the company's foreign income increased by 214.74% compared with the same period last year, and the proportion of foreign income increased to 32.80% from 13.20% in 2020.

The pace of performance growth of the company has been accelerated, the ability of cost control has been gradually enhanced, and R & D has been vigorously increased. The company's revenue from 2017 to 2021 showed a gradual upward trend, with a compound growth rate of 15.74%. In the first three quarters of 2022, the company's revenue was 7.624 billion yuan, an increase of 84.48% over the same period last year. The net profit of returning home was 343 million yuan, a year-on-year increase of 365.89%, exceeding the level for the whole of 2019. During the period from 2017 to 2021, the expense rate of the company showed a gradual downward trend, and the ability of cost management and control was gradually enhanced. In the first three quarters of 2022, the company's R & D expenditure reached 171 million yuan, an increase of about 59% over the same period last year, exceeding the level for the whole of 2021. The company's research projects include a number of new-generation battery technologies, and the company's core competitiveness is expected to continue to strengthen.

Investment suggestion: with the reduction of upstream raw material prices and sea freight costs in the future, the company's new backplane capacity release, battery export volume and photovoltaic application business are further expanded, and the company's performance is expected to continue the trend of rapid growth. At the same time, the company continues to increase its R & D, which is expected to further consolidate the company's core competitiveness. It is estimated that from 2022 to 2024, the EPS of the company will be 0.53,0.77 and 1.22 yuan respectively, and the corresponding PE will be 29 times, 20 times and 13 times respectively.

Risk hints: the risk of macroeconomic fluctuations; the risk of intensified market competition; the risk of fluctuations in raw material prices; the risk of recovery of receivables