A leading SaaS manufacturer for small and medium-sized enterprises, entering the photovoltaic field across borders. The company was founded in 2004. Based on the SaaS model, it has long focused on providing Internet services such as corporate email, internet domain names, and website construction to small and medium-sized enterprise customers, and collaboratively develop mobile communication resale and housing rental services. In December 2022, Liansheng Technology announced that it will enter the photovoltaic field and invest in the construction of an HJT battery manufacturing project. As of March 2024, the company's total planned production capacity for HJT batteries will reach 20 GW.

The HJT technology mass production node is expected to arrive, and the company is expected to benefit deeply. With the introduction of cost-reduction and efficiency technologies such as double-sided microcrystals, silver-coated copper, and 0BB, we expect HJT battery conversion efficiency to reach 25.5% in 2024, 110 μm silicon wafers are expected to be introduced, silver paste consumption is expected to drop below 8 mg/W, and the cost per watt of HJT batteries is expected to be on par with TopCon. In the future, along with process optimization, continued reduction in silver consumption, and continuous progress in low indianization of target materials, HJT still has a lot of room to reduce costs and increase efficiency. Considering that the component-side HJT has a power advantage of nearly 20W over TopCon, the HJT mass production node is expected to break through.

The production schedule exceeded expectations, and the framework agreement showed the strength of the product. The company's Meishan 8GW project broke ground on January 28, 2023, and successfully launched the first film on August 22. The project's commissioning schedule continued to exceed expectations. The average efficiency of the first batch of products reached 25.03%, and the highest efficiency reached 25.47%. The average power corresponding to 132 chip modules reached 710W+, and the highest power will exceed 720W. It is expected that 3.8 GW of production capacity will be completed by the end of 2023, and 8 GW of production capacity will be completed by the end of 24. In November '23, the company and Shandong Quanwei signed a 150MW sales contract for HJT cells; in March '24, the company signed a 700MW sales contract for HJT cells with Jiangsu Guosheng, demonstrating product competitiveness.

The signed project landed in Nantong to increase the production capacity of 12GW heterojunction batteries. In October 2023, the signing ceremony for the 12GW heterojunction battery project between Liansheng PV and Jiangsu Nantong was successfully held. The first phase of the 3GW project will be completed in September 2024, with an estimated total investment of 2 billion yuan. After the first phase is delivered, construction of the second 3GW and phase III 6GW projects will commence depending on the situation.

Investment advice: The company's net profit for 24-26 is expected to be 0.37/1.60/343 million yuan, respectively, with year-on-year growth rates of +194%/+329%/+115%, respectively. Considering that the company is a domestic photovoltaic cross-border enterprise, it is expected that the first to lay out heterojunction technology will open up a new market. Covered for the first time, a “gain” rating was given.

Risk warning: PV installation falls short of expectations; HJT mass production falls short of expectations; technology iteration risk