Deeply involved in the photovoltaic industry, highlighting three businesses. The company is one of the established enterprises in the global photovoltaic industry, and attaches importance to technological innovation and investment in R&D. At present, the company has formed three business segments: solar cell modules, polysilicon, and solar photovoltaic power plants. In terms of solar cell modules, the company invests heavily in HJT cell research and development, with battery conversion efficiency reaching new highs and cell costs falling; on the polysilicon side, the company acquired the concentrated silicon industry's self-built silicon production capacity, which helped control the cost of cells while enjoying the dividends of high-price silicon materials; in terms of solar photovoltaic power plants, the company closely followed the “Belt and Road” initiative to actively lay out photovoltaic power plants around the world, and projects have landed in Spain, Italy, Mexico, Vietnam, Australia and other countries. In the rapidly growing photovoltaic industry, as an established enterprise in the photovoltaic industry, the company continuously optimizes its business structure, increases product gross profit, and has won awards such as “2021 Best Supplier of Heterojunction Battery Modules”.
Dongfang Risheng continues to break through in heterojunction technology. Fuxi components are representative products of heterojunction technology. Dongfang Risheng Foxi battery can achieve a conversion efficiency of 25.5% and an output power range of 700W-710W.
In terms of thinning, Dongfang Risheng has implemented 110 μm battery chip technology. The pilot line has already used 100-90 micron silicon wafers for verification. The fragmentation rate is controlled within 0.43%, and the yield is above 99.2%. In the future, it will achieve 210mm+80μm large-size ultra-thin silicon wafers. In terms of the number of grids, the company's 2023 heterojunction battery uses 0BB no main gate technology to reduce costs and improve battery reliability. Currently, paste with a silver content of 50% or less is used in mass production. Currently, the cost of silver paste per watt has been reduced to less than 8 cents.
Downstream demand is strong, and performance is growing rapidly. On January 30, the company released its 2023 performance forecast. In 2023, the company achieved net profit of 1.32 to 1.70 billion yuan, an increase of 39.73%-79.95% year-on-year, and realized net profit without deduction of 14.4-1.85 billion yuan, an increase of 40.39%-80.37% year-on-year. The significant increase in performance is mainly due to the fact that the global photovoltaic industry as a whole maintained a rapid development trend during the reporting period. The company further optimized the production capacity layout of the photovoltaic industry chain and actively developed the global photovoltaic market. During the reporting period, the company's overseas battery and module production capacity was effectively released, the North American component market achieved large-scale shipments, and the domestic component market's share of shipments increased. Affected by the above factors, the profitability of the company's PV modules increased compared to the previous year, which had a positive impact on the company's performance. In addition, during the reporting period, the company successively invested in new production capacity such as high-efficiency heterojunction cells and modules and began production, and the energy storage business and household photovoltaic business also grew.
Profit forecast: As an excellent domestic PV module company, the company is expected to further improve its market position as the penetration rate of new technologies such as HJT increases. We expect the company to achieve net profit of 17.0/ 23.2/2.83 billion yuan in 2023-2025, corresponding PE of 10/7/6 times. The 2024 profit was given a PE valuation of 9 times, and the target price was 18.3 yuan, maintaining the “buy” rating.
Risk warning: Downstream demand falls short of expectations, profit forecasts and valuation judgments fall short of expectations.