Report summary:
Leading photovoltaic tinned welding belt, has been deeply involved in segmented fields for more than 20 years. The company has attached great importance to technology research and development for more than 20 years. As of 23H1, the company has 78 authorized patents, including 16 invention patents, which is far ahead in the industry segment. The company has now become one of the most important suppliers of photovoltaic tinned welding tape in China. Its main products are interconnected welding tape and confluence welding tape. Benefiting from the growth in MBB welding tape market demand and the expansion of the company's MBB welding tape production and sales, the company's MBB welding tape accounted for 14.91%, 57.46% and 54.74% of revenue in 2019-2021, respectively. MBB welding tape became the company's main sales product. Since 2021, the company has also increased production and sales of new welding belts such as black welding tape and laminated tile welding tape, keeping up with the trend of technological iteration. Benefiting from strong demand in the downstream photovoltaic industry, the company's revenue and net profit increased from 550 million yuan and 33 million yuan in 2018 to 2.01 billion yuan and 100 million yuan in 2022. The company's market share in 2022 was 16.9%, ranking first in the industry.
The profitability of photovoltaic welding belt companies has been restored, and product iteration has accelerated with the development of N-type battery technology. As an important auxiliary material in the module process, photovoltaic welding tape has an important impact on module efficiency and power performance.
The rising prices of copper and tin, the main raw materials for photovoltaic welding belts in 2021-2022, put pressure on the gross margin of welding belt companies. As raw material prices stabilized in 2023 and leaders actively controlled fees and reduced costs, and business upgrades, the profitability of photovoltaic welding belt companies gradually recovered. After MBB welding belts became mainstream in the market due to the trend of large size and thinning of PERC cells, the rise of various N-type battery technologies also continued to promote the iterative upgrading of new welding tape products. Among them, the large-scale release of TopCon will create a large demand for SMBB welding tape, and the development of HJT and XBC is also continuously stimulating the release of low temperature welding tape and flat welding tape. The overall trend of photovoltaic welding tape is thinning and differentiation, helping to reduce silver consumption, reduce shading area, and increase module power.
The production and sales performance of welding tape was strong, and the profit structure and customer structure continued to improve. The company's capacity utilization rate has remained above 85% since 2019, and production continued to expand from 2020 to 2022, reaching 12,400 tons, 16,300 tons and 25,100 tons, respectively. The company is currently actively expanding the SMBB welding belt business, which is expected to improve the company's profit structure. The company's top five customers account for a relatively high share. Currently, the share of the largest customer is gradually declining.
Investment suggestions: We expect operating income for 2023-2025 to be 2,953 billion yuan, 3,998 billion yuan, and 5.119 billion yuan respectively; net profit of the mother is 188 million yuan, 255 million yuan, and 323 million yuan respectively, giving it a “buy” rating.
Risk warning: Downstream demand falls short of expectations; competition for photovoltaic welding belts is intensifying.