GCL 23H1 achieved main business revenue of 20.946 billion yuan, +41.80% year-on-year, and net profit of 5.518 billion yuan, or -20.1% year-on-year. 23Q2 The company achieved revenue of 9.756 billion yuan, -12.82% month-on-month, and net profit of 1,428 billion yuan, or -65.09% month-on-month.
Discontinuation of rod-shaped silicon production affected Q2 profits. In the first half of the year, polysilicon produced 11,000 tons (82,000 tons of granulated silicon), shipped 101,000 tons (70,000 tons of granulated silicon), 90,000 tons of foreign sales (65,000 tons of granulated silicon), average sales price of 124,000 yuan/ton, revenue of 1.1 billion yuan, and 257 GW of silicon wafers. The sharp drop in polysilicon prices led to a year-on-year decline in gross margin of the PV materials segment by 6.1 percentage points to 41.9%. The company's production capacity of 45,000 tons of rod-shaped silicon in Xuzhou was discontinued in June and replaced with granulated silicon. At the same time, fixed assets were reduced by 800 million yuan. At the same time, R&D expenses increased, resulting in lower performance than expected.
The cost advantage of granular silicon is remarkable, and perovskite technology continues to advance. The company currently has a production capacity of 280,000 tons of polysilicon holdings, all of which are low cost granular silicon. The production cost at the Leshan base dropped sharply from 46,200 yuan/ton at the end of March to 35,500 yuan/ton in July, which is at the lowest level in the industry. The 100,000-ton base in Hohhot, which began construction in November last year, is scheduled to be put into operation in October. After production is put into operation, the company's granular silicon production capacity will increase to 400,000 tons. The company expects that after full production, the production cost at the Xuzhou base will be 2,000 yuan/ton higher than Leshan, and that the Baotou and Hohhot bases will be close to Leshan. The Leshan project is divided into 5 modules, 20,000 tons per module. For the new project, the company plans to increase the single module size of the proposed project from 20,000 tons to 60,000 tons, which can reduce the investment amount per unit capacity by 30%, save energy consumption, etc., which will further reduce the cost of granulated silicon. The proportion of the company's products with a total metal impurity content of less than 0.5 ppbw of granulated silicon has reached 70%, met the requirements for N-type silicon materials, and has a base of 85%. The quality of granulated silicon continues to improve. The company's perovskite conversion efficiency reached 16% in the first half of the year. Currently, it is progressing smoothly, and is expected to exceed 18% by the end of the year.
Investment suggestions: The company is expected to achieve net profit of 86.13/58.92/8.545 billion yuan in 23-25, with a year-on-year ratio of -49.3%/-31.6%/+45.0%. EPS is 0.32/0.22/0.32 yuan respectively, maintaining a “buy” rating.
Risk warning: risk of overcapacity in the industry, geopolitical risk, risk of technological progress substitution