Introduction to this report:
The monocrystalline blade has been successfully sent for inspection. The future certification point may exceed market expectations. Performance will soon usher in rapid growth and maintain the rating for increased holdings.
Key points of investment:
Maintain the increase in holdings rating. Maintaining the company's 2016-2018 EPS forecast of 0.09/0.39/0.58 yuan, short-term performance was greatly affected by the cessation of main sales of molybdenum powder in the short term, but considering that the company's monocrystalline blades have been successfully sent for inspection, the order may be landed faster than the market imagined. Future growth is high and monopoly is strong, maintaining the target price of 37.2 yuan, space 57%, and maintaining the increase rating.
The quarterly results were in line with expectations. The company's revenue for the first quarter and net profit returned to the mother were 0/-6.33 million yuan, respectively, down 100%/262% from the previous year. The main reason was the cessation of sales of molybdenum powder, the main reason for which the company's performance forecast had previously been announced. Currently, the market price of molybdenum powder is 800 yuan/ton. We estimate the company's comprehensive cost is about 1,700 yuan/ton, so it is a wise choice for the company to suspend sales of molybdenum powder after the supply of long orders is completed. If they are reluctant to choose sales, it will only increase the amount of loss. We believe that choosing to stop production when metal prices are low reflects the flexible mechanism of private enterprises.
Optimistic about the value of company options. At the moment, the market is concerned that after the company's blade press conference, there will be few short-term catalysts. On the one hand, there is uncertainty about downstream certification, and on the other hand, the certification cycle is long, and order fulfillment is relatively late. We think we should think about a company's investment logic from the perspective of option value. Down:
The majority shareholders and SF Investment increased their holdings of the company's shares by 19.8/22.8 yuan by 100 million yuan, and they have strong confidence in the company's business. Upwards: The company currently has a production capacity of 10,000 monocrystalline blades per year and 80,000 polycrystalline blades/year. It is expected that a new production line will be put into operation by the end of 2016. Once the certification is passed and the order is released, the net profit of the two lines after full delivery is expected to be 600-800 million yuan. There is plenty of room.
Catalyst: Order for monocrystalline blades landed.
Risk warning: risk of order not being fulfilled, risk of certification failure.
