Event: on January 31, the company issued a 2022 performance forecast. In 2022, the company expects to achieve a net profit of-130 million million yuan, a decrease of about 0.01 million yuan over the same period last year. It is expected to realize a net profit of-1.58 billion yuan-138 million yuan, a decrease of about 0.45 million yuan over the same period last year.

The performance in 2022 is under pressure, mainly affected by the rise in raw material prices and non-recurrent losses. The company expects the net profit and deduction of non-return net profit to decline in 2022 compared with the same period last year. The main reasons for the performance loss include: ① is affected by the rising prices of commodities and other raw materials, and the company's procurement costs rise; ② increases the upgrading of machinery and equipment products, optimizes and integrates product lines, focuses on market competitive product production, and deducts an asset impairment loss of about 34 million yuan on some products and assets. ③ made a provision for bad debts of about 29 million yuan.

Actively layout the photovoltaic business and be optimistic about the long-term development of the company. In 2022, the company's photovoltaic business and composite products business revenue increased greatly compared with the same period last year, showing a good trend of development. The company plans to invest in the construction of 10GW TOPCon photovoltaic cell project in Quanjiao County Economic Development District (phase I), of which phase 1-1 planned capacity 4GW (planned investment of 1.856 billion yuan), phase 1-phase 2 planned capacity of 6GW; and 5GW HJT photovoltaic cell and 3GW photovoltaic module project (phase II). If the project is implemented smoothly, it will help to expand the company's photovoltaic cell capacity, optimize the layout of the company's new energy industry, and continuously enhance the company's comprehensive competitiveness.

The cost reduction and benefit of copper electroplating is obvious, and the project is progressing smoothly. The company's copper plating technology is currently in a leading position in China, can be shared in HJT and TOPCon technology, standard traditional battery silver paste, the use of copper plating technology can reduce the cost by about 50% and increase the conversion efficiency by 0.3%. At present, the company has a good effect in the copper plating test line, and the process tends to be stable. It is expected to have the industrialization capacity in 2023 and form a large-scale production capacity in 2024. Based on this, we believe that the company is expected to become the first photovoltaic enterprise in the industry to apply copper plating process.

The high boom in the TOPCon industry will continue in 2023, and the company is expected to fully benefit. We believe that the first wave of opportunities for TOPCon is a high boom led by higher-than-expected product parameters, and this logic has been fully interpreted at present; the second wave of opportunities is to expand production beyond expectations by cashing in profits. The net profit per unit W of TOPCon battery is 0.08-0.10 yuan / W, and the payback period of investment is only 1.5-2 years. According to incomplete statistics, the capacity and shipments of TOPCon batteries in 2023 are expected to exceed 190GW, 110GWMagol 2023 is still the year of TOPCon production expansion, the industry boom continues, the company is expected to fully benefit.

Profit forecast: based on the company's 2022 performance forecast, TOPCon's high profit level and the company's proposed 15GW high-efficiency photovoltaic battery project, we expect the company's 2022-2024 net profit to be-1.19,3.07 and 896 million yuan, with a corresponding PE of-42,16,6 times respectively. Cover for the first time, giving a "buy" rating.

Risk tips: photovoltaic projects are not as expected; copper plating projects are not as expected; TOPCon profits are not as expected.