As the market leader of photovoltaic backplane, the company breaks the technology monopoly of foreign enterprises and leads the world in cumulative shipments. Since 2008, the company has immediately focused on photovoltaic accessories-backplane link. On the basis of previous research and development experience of polymer materials, Zhonglai successfully developed FEVE fluorocarbon coatings with tetrafluororesin as the theme through independent research and development, using organic-inorganic nano-hybrid technology and molecular design interconnection penetration technology, and finally developed a coated backplane product through a variety of series processing, becoming one of the first enterprises in the industry to realize the industrialization of coated photovoltaic backplane. The coated backplane products do not need to use fluorine film and adhesive, which breaks through the technological monopoly of European, American, Japanese and other enterprises.
By the first half of 2022, the cumulative shipments of the company's backplane products exceeded 184GW, among which the cumulative shipments of FFC double-sided coated backboards exceeded 110GW, outdoor stable operation for more than 13 years, and no complaints from end customers.
Early N-type route explorers, and finally determine the TOPCon route, rich customer resources, products used in many projects around the world. As early as 2016, Zhonglai announced that it had raised 1.5 billion yuan for the annual 2.1GW N-type single crystal double-sided solar cell project, marking the beginning of Zhonglai's entry into the field of N-type high-efficiency single crystal cells. The company's existing capacity is 7.6GW, and the total capacity planning is about 20GW. The company's N-type TOPCon double-sided module products are well received by customers for their high power, high reliability, high double-sided rate, low attenuation, low temperature coefficient and a series of advantages, and have maintained long-term and stable cooperative relations with China National Power Investment Group, Yellow River Hydropower, Power Construction Group, Guangzhou Nuclear Power, Shaanxi Construction Engineering, Guangdong Power, JinkoSolar Holding Co Ltd, ACWA, Sharp, Japan Marubeni, EDF, Iberdrola, Enel and so on, and the products are used in many projects around the world.
In the binding of distributed photovoltaic business, there are plenty of orders on hand. In February 2021, a subsidiary of the company and CLP established a joint venture with Shanghai Yuanye New Energy Co., Ltd., in which CLP holds a 70% stake and Zhonglai Minsheng holds a 30% stake. On April 30, 2021, the subsidiary signed a supplementary agreement with China Power Investment Corporation, stipulating that the target value of installed capacity in the first year after the establishment of Shanghai Yuanye is at least 1.2GW for grid-connected power generation, the target value of annual average new installed capacity from the second to the fifth year is not lower than 1.5GW, and the cumulative installed capacity over the past 5 years has reached more than 7.2GW. Zhonglai Minsheng and Zhonglai Zhaopin provide household photovoltaic EPC project general contract services for Shanghai Yuanye. The project cooperation period is 5 years.
By the end of 2022H1, the company has signed cooperation framework agreements with 110 cities / counties / towns, and the proposed capacity has reached about 10.75GW, which provides a solid guarantee for future business development.
Zhejiang can or enter the master, superimposed Shanxi photovoltaic industry chain dominant position, production capacity is expected to accelerate the landing. In the "implementation Plan of key Industrial chain and chain length working Mechanism of Shanxi Province" issued in July 2022, Zhonglai has become one of the 20 "chain main" enterprises in Shanxi's 10 key industrial chains. On September 29, Shanxi Energy Bureau and Shanxi Department of Industry and Information Technology issued the "implementation Plan of Shanxi Photovoltaic Industry chain", which clearly stated in the key tasks to continuously strengthen industrial advantages and promote the project to produce 16GW high-efficiency single crystal cells, 200000 tons of industrial silicon and 100000 tons of high-purity polysilicon in the middle and next year. Zhejiang Electric Power announced on November 11, 2022 that it intends to transfer 106 million Zhonglai shares held by Zhang Yuzheng through cash payment with its own funds, with a transfer price of 17.18 yuan per share, with a total transfer amount of 1.817 billion yuan. at the same time, it is proposed to obtain the voting rights corresponding to the 109 million shares held by Lin Jianwei. After the completion of the transaction, Zhejiang Electric Power will become the actual controller of the company.
Investment advice: the company as a photovoltaic backplane leader, backplane production capacity continues to expand, gross profit margin to maintain a high level, the leading position is stable. With the continuous release of new capacity, the profitability of the battery and component business will also be significantly improved in the context of the decline in raw material prices in the future. Downstream bound to central enterprises, with the promotion of the distributed market throughout the county, the company's photovoltaic application system business has sufficient orders on hand. We estimate that the company's operating income from 2022 to 2024 will be RMB 197.6527.261 billion, a year-on-year growth rate of 108.7%, 62.7%, 37.9%, 5.85, 965, 1.42 billion yuan, and 286.7%, 65.0, 47.1%, respectively. The company will be given a "buy" rating corresponding to the closing price of PE on November 24, 2022.
Risk hint: the industry competition aggravates the risk; the industry policy change risk; the company capacity construction is lower than the expected risk.