Capacity utilization remains high, raising capital to expand production to meet market demand. In 2020-2022 and the first half of 2023, the capacity utilization rates of the company's photovoltaic welding belt products were 99.47%, 85.99%, 89.05% and 86.05%, respectively, and remained at a high level. In 2023, the company plans to raise capital by issuing convertible bonds to unspecified targets to increase the production capacity of 20,000 tons of photovoltaic welding belts. The company plans to add multiple high-performance photovoltaic welding belt production lines through the implementation of this project to increase the production capacity of high-quality interconnect welding belts and confluence welding belts according to customer needs, thereby complementing and optimizing the company's product structure and meeting the market demand for high-performance photovoltaic welding belts, thereby strengthening the company's profitability and creating new profit growth points for the company's future development.
R&D investment continues to increase, and new technologies remain at the leading level of the industry. The company insists on developing technologically forward-looking welding belt products, maintains leading process technology, continues to lead the photovoltaic welding belt segment, and is at the advanced level in China in terms of R&D strength and product quality. In 2019-2022, the company's R&D expenses increased from 0.18 million yuan to 164 million yuan, and the CAGR reached 51.04%. In the first half of 2023, the company invested 40 million yuan in R&D, an increase of 20.80% over the previous year. Currently, the company has 78 authorized patents, including 16 invention patents. The number of effectively authorized invention patents is far ahead in the industry segment. The company's R&D investment in the field of photovoltaic welding belts continues to grow, the size of the R&D team continues to expand, and the R&D results continue to produce high-quality output. Over the years, the company's research and development capabilities for new technologies have been in a leading position in the industry.
Downstream customer partnerships are stable, and component shipments drive the growth of the welding belt business. With first-class products and services, the company has successfully entered the supply chain of a number of well-known crystalline silicon solar photovoltaic module manufacturers, such as Longji Leye, Trina Solar, Hanwha New Energy, Jinko Energy, and Artes. In the first half of 2023, the company's top five customers were Jingke Energy, Tianhe Solar, Jingao Technology, Artes and Longi Leye, accounting for 13.55%, 12.64%, 6.84%, 6.78%, and 6.61% of sales revenue, respectively. Through long-term cooperation with internationally renowned photovoltaic module manufacturers, the quality of the company's products has been verified by the market, and the company is also actively developing new customers. In the future, as component companies' shipments increase, the company's welding belt business is expected to benefit.
Investment advice: We expect the company's revenue for 2023-2025 to be 2,40/36.12/4.231 billion yuan, net profit to mother of 1.582.34/310 million yuan, EPS 1.52/2.25/2.98 yuan respectively, and PE 29.62/20.01/15.10 times. The company covered it for the first time and gave it a “recommended” rating.
Risk warning: Risk that market demand falls short of expectations, competition increases risk, and risk of economic fluctuations.