Incident 1: On March 8, 2024, the company announced the “Notice Concerning the Signing of Major Sales Contracts for Daily Operations” and signed a “Cell Purchase Contract” with Jinko Energy. The company will sell approximately 2.5 billion solar monocrystalline cells/Class A chips, including but not limited to 182 size, to Jinko Energy from January 1, 2024 to December 31, 2025.
Incident 2: On March 8, 2024, the company announced the “Notice on the Company's Intent to Sign an Investment Cooperation Agreement with the Ziyang Airport Economic Zone Management Committee” and signed an “Investment Cooperation Agreement” with Jinko Energy and Ziyang Airport Management Committee to build an R&D and manufacturing base with an annual output of 20GW silicon wafers and 20GW solar cells. The first phase of construction will produce 10GW silicon wafers and 10GW solar cells per year. The second phase will be built according to project progress and market conditions.
In order to ensure the investment, construction and operation management of this project, the joint venture jointly established by the company and Jinko Energy will be the implementing entity of this project. Among them, the company holds 90% of the shares and JinkoEnergy holds 10% of the shares.
Joining hands with Jinko to build leading production capacity, production and research are expected to quickly reach the forefront of the industry. According to the announcement, the first phase of the Rinkong Base project will commence plant construction in April 2024, and the first film is expected to be rolled out by the end of the fourth quarter of 2024. In terms of capital, the company pays for the purchase of equipment. The planned capital will be covered through 35% of its own capital and 65% of its own funds. The rest of the construction costs will be funded by the local government. Join hands with leading TopCon companies to build leading production capacity. With the support of the company's strong industrial and research team and the investment of leading companies, production and research is expected to quickly reach the leading edge of the industry.
Large battery orders have been placed, and the operating rate has been strongly guaranteed. According to the announcement, JinkoSolar will purchase approximately 2.5 billion solar monocrystalline cells/Class A chips from the company in 2024-2025.
According to TopCon's 8-watt single-chip calculation, the company's annualized order is close to 10GW, which strongly guarantees the company's 2024-2025 TopCon production capacity operating rate. With production capacity at the Ningguo base and Rinkong base, we expect the company's shipments to reach 12/30 GW in 2024/2025.
Investment advice: The company's supporting equipment business fundamentals are solid, providing a good soil for the development of the photovoltaic business. With the rapid implementation of the company's battery production capacity, the photovoltaic business is expected to bring about large increases. The company simultaneously lays out the upstream silicon wafer process. As the company's leading integrated silicon wafer+cell production capacity accelerates, the company is expected to fully benefit from the rapid growth of the industry. We expect the company's revenue in 2023-2025 to be 3,078 billion yuan, 11.767 billion yuan, and 18.167 billion yuan respectively; net profit to mother will be 210 million yuan, 637 million yuan, and 935 million yuan respectively, corresponding to EPS of 1.46 yuan, 4.43 yuan, and 6.51 yuan respectively. This is the first coverage, giving it a “buy” rating.
Risk warning: raw material price fluctuation risk, downstream demand risk, increased market competition risk, policy risk.