Incident: According to the company's announcement, the company signed a “Strategic Cooperation Agreement” with Tianjin Huanrui Technology Co., Ltd. (hereinafter referred to as “Tianjin Huanrui”). Negotiations agreed to plan to sell 22.5 GW ± 4.5 GW of ultra-white embossed or ultra-white float glass for solar energy from January 1, 2023 to December 31, 2025. According to preliminary estimates, the total sales amount is estimated to be around 3 billion yuan. Specific products include, but are not limited to, single glass, double glass, etc. with thickness specifications such as 3.2 mm, 2.8 mm, and 2.0 mm. According to the sales volume of a single glass with a sales volume of 22.5 GW and a product thickness of 3.2 mm, based on current market price estimates, the total sales amount is estimated to be about 3 billion yuan.
Comment:
The price of photovoltaic glass is stable, and large contracts have boosted business development: as of December 14, 2022, the average price of 3.2mm coated photovoltaic panel glass was 27.50 yuan/square meter, which was flat month-on-month, +5.77% year on year; the average price of 2mm coated photovoltaic glass was 20.50 yuan/square meter, which was flat month-on-month, +2.50% year on year. The total sales amount of the company signed the contract is expected to reach 3 billion yuan, and the company's photovoltaic glass sales revenue will reach 1.32 billion yuan in '21. Assuming that the contract sales will contribute an average of 1 billion dollars in revenue over 23-25 years, the order contributed 75.8% of the total revenue of the photovoltaic glass business in '21. It is expected that the future will contribute greatly to the company's revenue growth, and the company's photovoltaic glass business is progressing brilliantly.
The ability to obtain orders has been proven, and we look forward to further expansion of the production capacity of photovoltaic glass in the medium to long term: Q3 2022, benefiting from the successful completion and commissioning of the Jiaozuo Ancai and Xuchang Ancai photovoltaic glass projects, the company's photovoltaic glass production capacity doubled from about 900 t/d to 2,600 t/d per day. The signing of this contract fully proves the company's ability to obtain orders and will also strongly promote the increase in the production and sales rate of the company's new production capacity. The company's vigorous development of the photovoltaic glass business in recent years has been very effective, and the company itself has the advantage of supplying its own natural gas. We judge that the company's photovoltaic glass production capacity may continue to expand in the future, thus strongly driving the company's performance growth.
The diversified layout drives growth, and the company's strategic opportunity period is already here: photothermal power generation is receiving more and more attention in the construction of large-scale wind power photovoltaic bases. The International Energy Agency predicts that the global installed capacity of photothermal power generation is expected to reach 73 GW in 2030, with a compound annual growth rate of 28%. Recently, the company reached cooperation with a domestic 100MW photothermal power generation project and signed the first batch of photothermal glass orders. According to company statistics, if the first batch of orders were all confirmed as revenue, the estimated revenue would account for 0.4% of the company's revenue in 2021. The company is a pioneer in the domestic photothermal glass field. The current development trend of the photothermal power generation industry is clear. Although the industry is small, the future will still be broad. Moreover, the company currently also has a presence in the pharmaceutical glass and electronic glass fields. We are very optimistic that the company will seize the period of strategic opportunity and achieve a gorgeous transformation.
Profit forecasting, valuation and rating: Since this contract has not yet been executed, we are optimistic about the company's development layout, as well as the company's deep technical and strength heritage, maintaining the company's 22-24 EPS of 0.27, 0.44 and 0.64 yuan, maintaining the “increase in holdings” rating.
Risk warning: The price of photovoltaic glass is declining, and the contract fell short of expectations.