Key points of investment:
The interconnect belt and confluence belt are progressing simultaneously, and performance continues to grow, driven by technology. The company's main business is photovoltaic welding belts, including interconnect belts and confluence belts. According to the company's 23rd semi-annual report and the 22nd annual report, the sales revenue of the company's welding belt interconnect and confluence belt products in 2022 accounted for 76.49% and 22.53% of the company's total revenue, and revenue increased by 64.78% and 56.46%, respectively; while 23H1's share of welding belt interconnect and confluence belt revenue changed to 78.56% and 19.75%, and revenue increased 39.99% and 7.23% year-on-year respectively, and the performance achieved steady growth.
A leader in the welding belt industry, three major advantages help it rank at the forefront of the industry. 1) It has an advanced R&D, process technology team and advanced patented technologies in many industries. As of 23Q2, the company has 78 authorized patents. The main projects under development include the development of high-efficiency composite 0BB ultrafine wire for HJT; 2) Leading product quality:
The company's products meet the ISO 9001:2015/GB/T19002-2018 quality management system certification standards, and are the only welding belt supplier in the photovoltaic welding belt segment to receive the title of “Outstanding Contributor to Standardization”; 3) It has established long-term and stable cooperative relationships with a large number of well-known crystalline silicon cell solar photovoltaic module manufacturers, and has entered the supply chain of leading component vendors such as Longji Leye, Tianhe Solar, Jingke Energy, and Artes in the global photovoltaic module industry. We believe that by strengthening the stability of cooperation with suppliers, continuous R&D and innovation, and optimizing the product structure, the company will continue to maintain the stability of product quality and industry position.
Deeply develop 0BB technology, focusing on forward-looking technology research and development for photovoltaic tinned welding belts. The company has thoroughly developed 0BB welding belts. The introduction of 0BB technology on the battery side can not only reduce the amount of silver paste used, but also promote power increase and reduce power attenuation problems. At present, the 0BB welding belt independently developed by the company has strong performance stability and product reliability, and has been widely recognized by customers. With the development of diversified technology paths for various battery modules, the company has also developed high-quality welding belt products suitable for different components, maintaining the advantages of pioneering technology, leading mass production, and market dominance. We believe that with the R&D and application of cutting-edge technologies such as 0BB, the company's market share is expected to continue to increase.
Profit forecast and rating: We expect the company's net profit to be 1.61, 2.56, and 362 million yuan respectively in 23-25, up 61%, 59%, and 42% year-on-year. The company is a leading enterprise in the photovoltaic welding belt industry, and its profitability remains at a high level. Refer to comparable companies that gave the company a PE valuation of 19-20 times in 2024, corresponding to a reasonable value range of 46.74-49.20 yuan, giving it a “superior to the market” rating.
Risk warning: risk of downstream demand falling short of expectations; risk of industry and market competition; customer risk.