Overview of events
According to the announcement on February 15, 2023, Ms. Zhang Yuzheng has completed the registration formalities for the transfer of about 106 million shares (accounting for 9.70% of the company's total share capital) to Zhejiang Neng Electric Power by agreement. The date of transfer is February 13, 2023. After the completion of the transaction, Zhejiang Neng Power will hold 9.7% of the shares of the company and control 19.7% of the voting rights of the company. The actual controller will be changed from Mr. Lin Jianwei and Ms. Zhang Yuzheng to Zhejiang SASAC. According to the previous announcement, Zhejiang Neng Electric Power transferred shares by paying cash, the transfer price is 17.18 yuan per share, and the total transfer price is about 1.817 billion yuan.
The shares were transferred successfully for four times, and the SASAC of Zhejiang Province became the actual controller. The company has tried to transfer shares to Wujiang Energy, Hangzhou Pot and Jiang Yan Road to ease financial pressure, but failed three times. The company withdrew its application for fixed increase in April 2022, and the progress of fund-raising was hindered, and the superimposed Shanxi 16GW TOPCon battery project, 250 million flat backplane expansion, 200000 tons of industrial silicon and 100000 tons of polysilicon projects were carried out at the same time, the company is under great financial pressure, and the previous plan is to solve the capital problem through bank financing, equity financing and other channels. After the change of the actual controller, it is expected to give full play to the advantages of the integrated development of state-owned capital and private capital. Zheneng Electric Power will provide financing support for the company, which is expected to ease the financial pressure of the company and promote the smooth expansion of the three projects.
TOPCon battery and backplane business continues to expand production, the company's performance flexibility is expected to be released. The net profit of the company in 2022 is expected to be 346 million yuan ~ 410 million yuan, turning losses into profits. We believe that after the change of the company's actual controller, the progress of the company's battery and backplane capacity is expected to accelerate, and revenue is expected to grow rapidly. Benefiting from the price reduction in the upper reaches of the industrial chain, the company's battery profits are expected to improve, volume and profit will rise, boosting the flexible release of performance.
Investment suggestion
We expect the company's operating income from 2022 to 2024 to be 109.29 yuan, 176.88 yuan and 24.741 billion yuan respectively, an increase of 88%, 62% and 40% respectively over the same period last year, and the net profit of returning home is 3.92,9.21 and 1.473 billion yuan respectively, up 225%, 135% and 60% respectively over the same period last year. The current stock price corresponds to a PE of 51, 22 and 14 times for 22-24 years, respectively. Maintain a "buy" rating.
Risk hint
The risk of battery and backplane expansion is less than expected; the price of industrial chain fluctuates sharply; the market competition aggravates the risk.