The rapid development of the photovoltaic industry lays the foundation for the demand for photovoltaic accessories, and the market space for photovoltaic junction boxes is broad:

The rapid development of photovoltaic industry lays the foundation for the demand for photovoltaic accessories. According to the forecast of CPIA statistics institutions, the new installed capacity of global photovoltaic will reach 195-240GW in 2022, and it will reach 270-330GW in 2025. The development of global photovoltaic market starts the acceleration mode. Photovoltaic junction box industry has two major barriers to technology and customer accumulation. According to our estimation, the new market size of junction box in the world from 2022 to 2025 is estimated to be about 98Universe 106Compact RMB, and the new market size of junction box in China is estimated to be about RMB 3.6-3.7 billion per year. The new market size of photovoltaic connectors worldwide from 2022 to 2025 is expected to be about 1.89 billion yuan. At the same time, the safety requirements of photovoltaic connectors are high, the domestic replacement rate is increasing, and the company has broad prospects for development.

The company is the target of domestic scarce photovoltaic junction boxes and connectors, capacity utilization and production and marketing rate are maintained at a high level:

The company is the target of domestic scarce photovoltaic junction box and photovoltaic connector, and is expected to benefit from the rapid increase in demand for photovoltaic modules and the strengthening of domestic alternative logic in the future. The company has entered the photovoltaic industry for many years, photovoltaic junction boxes and connector products have a sound production and sales system, the company's main products photovoltaic junction boxes and photovoltaic connectors capacity utilization rate and production and marketing rate are more than 90%, 2021 production utilization rate of more than 95%. According to our estimates, the company's global market share will be about 8% in 2021.

The top two customers are global photovoltaic module TOP3 enterprises, looking forward to the layout of intelligent photovoltaic junction boxes:

At present, the company's main customers include Trina Solar, Jing O Solar, Ates, Oriental Sunrise, Youda Optoelectronics, Tongwei shares, Suntech Power, Zhonglai shares, Xiexin Integration, HANSOL, ADANI and other domestic and foreign mainstream photovoltaic module factories. The company's top two customers Trina Solar and Jing'ao Solar ranked second and third in the world in component shipments in 2021. The company's photovoltaic connector occupies a high share in Trina Solar and Jing'ao Solar Energy, and its performance is close to the MC connector level of St ä Ubli, its main foreign competitor. The company is one of the earliest domestic companies in the same industry involved in the research and development of intelligent junction boxes, especially in MPPT efficiency optimization and fire shutdown of intelligent junction boxes. At present, the company has integrated the intelligent junction box controlled by IC chip and the "standard modular bypass protection circuit"

As a key development direction, the future is expected to benefit from the increased demand of the industry and the advantage of sufficient technology reserves to increase its share in the intelligent junction box market.

Investment advice:

We expect the company's operating income from 2022 to 2024 to be 1.133 billion yuan (+ 54.0%), 1.696 billion yuan (+ 49.7%) and 2.532 billion yuan (+ 49.3%), respectively. The estimated net profit is 112 million yuan (+ 72.8%), 177 million yuan (+ 57.7%) and 279 million yuan (+ 57.8%), respectively, and the corresponding EPS is 1.75,2.76,4.36 yuan respectively. We give the company 40 times PE in 2022, corresponding to the target price of 110.40 yuan, covering for the first time and giving the "Buy-A" investment rating.

Risk tips: the risk of being greatly affected by changes in industrial policy in the photovoltaic field, intensified market competition, rising prices of raw materials, and the risk that R & D results fall short of expectations.