Recently, the company announced the photovoltaic materials division business update announcement for the third quarter of '23: from July 1, 2023 to September 30, 2023, the company's photovoltaic materials business segment profit was about 921 million yuan; granular silicon production was about 53,607 tons, and granular silicon shipments were about 67,607 tons (including internal sales of about 3,611 tons); silicon wafer production and sales volume was about 15 GW.
Granular silicon production and production capacity are growing rapidly. (1) In the first three quarters of 2023, the company produced about 164,700 tons of polysilicon, including 136,000 tons of granular silicon and 28,700 tons of rod-shaped silicon; it shipped 168,700 tons of polysilicon, of which 139,600 tons of granulated silicon were shipped. The company's Q1/Q2/Q3 quarterly granular silicon shipments (including internal sales) were 469/542/67,600 tons, respectively. Q3 quarterly granular silicon shipments increased 479% and 24.7% year-on-year, respectively. (2) The 100,000 ton granular silicon project in Hohhot was officially put into operation on September 21. After it was put into operation, the company's granular silicon production capacity increased to 400,000 tons, further strengthening the company's position in the silicon market.
The cost advantage of granular silicon is gradually showing. The price of polycrystalline silicon materials was low in the third quarter, and the average price operating range for dense materials was about 60,000 to 80,000 yuan/ton. According to the company's announced segmental profit of 921 million yuan, after deducting the profit of the silicon wafer portion, we estimated that the company's average sales price of granular silicon in the third quarter (tax included) was about 65,000/ton, and the net profit per ton was about 10,000 yuan. During the low period of the industry, granular silicon products showed good profitability, and cost advantages gradually became apparent.
The quality of granulated silicon continues to improve, and perovskite research and development remains at the forefront. According to information from the company's third quarter performance exchange meeting, by the end of the third quarter, the proportion of the company's products with a total metal impurity content of less than 0.5 ppbw had exceeded 80%, and the quality was constantly improving. The granular silicon used in N-type products was about 5000-6000 tons/month, and the market's recognition of granulated silicon continued to increase. The company continues to maintain a leading position in perovskite module research and development. The photoelectric conversion efficiency of the company's perovskite exceeded 16% in the first half of the year. It is expected that the module efficiency will exceed 18% by the end of 2023, and tendering and construction of a new GW grade perovskite production line will begin within the year, which is expected to contribute production capacity in 2025.
Profit forecast and valuation: We expect the company's polysilicon production to reach 24/32/400,000 tons in 23-25, respectively, with net profit of 70.12/5595/7.556 billion yuan, corresponding EPS of 0.26/0.21/0.28 yuan, respectively. Since the industry is currently still in a period of adjustment, PE 8X for 2024, corresponding to the company's target price of HK$1.80, was given a “buy” investment rating.
Risk warning: The scale of new PV installations fell short of expectations; the price adjustment for polycrystalline silicon materials exceeded expectations; granulated silicon production capacity fell short of expectations; CCZ technology research and development and promotion fell short of expectations.